Crypto Mastermind summary:
More than 80% of central banks worldwide have already considered introducing CBDCs. This was published in a report by the Bank For International Settlements (BIS).
Banks and governments are showing more and more interest in the technology, among other things because of the faster and at the same time more secure processing of transactions.
Some pilot projects have already completed their first test runs and are being tested in individual trading areas. According to the BIS, many other projects are currently in research and development.
Where in 2018 an average of four out of five central banks still had a negative attitude towards CBDCs (Central Bank Digital Currencies), most central banks are now at least considering the possibility of setting up digital currencies. And many are not only talking about it, but are actively studying the CBDCs and researching their application. The idea of turning one’s own central bank into a digital currency is increasingly accepted and supported. This is the conclusion of a new report published by the Bank For International Settlements (BIS).
Banks and governments want CBDCs
According to the BIS, 36 central banks had already published their work on CBDCs in mid-July 2020. According to the BIS reports, more than 80% of the world’s central banks already had considered introducing CBDCs in January.
Gregory Klumov, CEO of Statis (Stablecoin pegged to the euro) explains why interest is growing:
„On demand, irreversible, immutable, auditable, almost-instant transactions. Like cash but better as the cost of counterfeiting is sky high [and therefore] economically unviable.“
Immutable, forgery-proof and fast transactions make the handling of money easier and at the same time safer. This is probably one reason why more and more banks and governments are interested in the technology and want to research it. Even though the development of CBDCs is still in an early stage.
According to Klumov, the main benefit for governments would be, that it
„disrupts clearing, custody and settlement-services that became oligopolized [by commercial entities].“
The first projects are already being implemented in practice
According to a review of 175 states by the BIS, interest in CBDCs is currently
„strongly associated with higher mobile and internet use, a higher innovation capacity, an existing or planned [fast payment system] and greater government effectiveness.“
However, three states have already completed a CBDC pilot project. And six more such projects are currently developed. 13 countries are exploring wholesale CBDCs for cost reduction and higher transaction speed. And another 18 countries have already conducted research and published documentations on similar projects.
Some current examples are the Brazilian Central Bank, which recently appointed a research group of 12 developers for a CBDC. The goal is to improve the current handling of transactions between people and even countries. After six months the deadline is set for a corresponding report.
The Boston FED also recently partnered with the Massachusetts Institute of Technology (MIT) to research digital currencies. For that, more than 30 different block chain networks are currently being compared in order to investigate a possible application for a digital dollar.
Also the People’s Bank of China (PBoC) announced, that they’re already testing their digital yuan in retail transactions. The projects are taking place in Beijing and the provinces of Tianjin and Hebei. Sun Guofeng, CEO of PboC said the currency will probably be introduced before the Winter Olympics in 2022, as it will be used during the event.
Overall, some projects have already passed their first test. And many more are currently in development. Based on the statements of some banks, it can be assumed that this number will continue to rise. Although the development of CBDCs is still in its infancy, the strong increase in interest seems to be driving progress massively.