What To Expect From The Top CBDCs In 2021
The discussions surrounding Central Bank Digital Currencies (CBDCs), which are digital representations of local currencies, have been a long and hot topic of discussion in the cryptocurrency space. The difference between these digital currencies and fiat currencies is that, despite being regulated by the issuer country’s Central Bank, digital currency relies on blockchain technology, unlike local currencies.
Digital currency can not also be called cryptocurrencies as they can’t be used to trade in the crypto market. The first CBDC to launch is the sand dollar. The sand dollar, which was launched on 21st October 2020 by the Central Bank of Bahamas, like every typical currency, can be used to pay any merchant with a central bank-approved e-wallet on their mobile device with little or no transaction fees. Bahamas might be the first country to launch the CBDC, but a few other countries have announced plans and may follow suit. They include;
China’s Digital Yuan
The Asian country is being pegged to be the next country after the Bahamas to launch its CBDC. The plans to announce a digital yuan were first announced in 2014 and have since been researched upon, with few implementations by the People’s Bank of China. Testing the digital currency using Near Field Technology(NFT) has already taken place in cities like Shenzhen, Suzhou, Chengdu, and Xiong.
The country is expected to be among the first major economies to launch its sovereign currency to internationalize the yuan, break the U.S. Dollar’s monopoly on international payments, and control money laundering, which is becoming rampant in the country. The project is expected to see the light of the day in 2021.
The Digital Australian Dollar, Digital Thai Baht, E Krona, and The Digital Euro
While the possibility that the digital yuan will come into place this year, it is unsure whether the Australian digital dollar, digital Thai Baht, E Krona, and the digital Euro will all be implemented this year, despite plans in place for them. In a meeting, last November, the Reserve Bank of Australia (RBA) launched a partnership with Commonwealth Bank, National Australia Bank, Perpetual, and ConsenSys to research the feasibility of a CBDC using distributed ledger technology (DLT), which may launch in 2022.
The central Bank of Thailand (BoT), whose CBDC project is known as ‘Project Inthanon’, has already passed stage 3 of the implementation stage and will likely launch towards the end of 2021. On the other hand, the Swedish E Krona, whose pilot testing began with Accenture in 2019, already has implementation plans for November 2022, according to the country’s central bank, the Riksbank.
Lastly, the Digital Euro, a multinational CBDC Project by the European Central Bank (ECB), is still in prospection and deliberation by the European Union. There is no date in sight at the moment for testing or even implementation. Countries like the United States, the United Kingdom, Germany, and South Korea are also having conversations about their digital currencies as it continues to be a hot topic.