These Countries Are Considering A Central Bank Digital Currency. Here Are Their Timelines And Status
Digital currencies currently are rising in popularity. A global acceptance of these modes of transaction is facilitating this trend. While cryptocurrency gained much attraction due to its decentralised system, governments around the globe are trying to make the most out of virtual currencies in a different way. They can do this with the use of a Central Bank Digital Currency (CBDC), which will be under the control of the central bank. It’s basically the digital form of a country’s fiat currency. In this case, the central bank issues electronic coins or accounts backed by the government.
As of March 2022, 87 countries are considering issuing a CDBC, according to the Atlantic Council, an independent organisation based in Washington, D.C. Out of those, 9 countries —The Bahamas, Nigeria, and 7 countries in Eastern Caribbean Union — have already launched a centrally governed digital currency. About 2 years ago, in May 2020, only 35 countries were thinking of issuing a CBDC.
In October of 2020, the Central Bank of the Bahamas issued the Sand Dollar. It was the world’s first CBDC that covered an entire country.
In October 2021, Nigeria became the first African country to establish a CBDC. The eNaira is kept in a digital wallet and can be used for in-store contactless payments as well as money transfers.
Eastern Caribbean Union
Seven Eastern Caribbean Union countries developed their own digital currency to assist in speedy transactions and serve those without bank accounts. Antigua and Barbuda, Dominica, Grenada, Montserrat, St. Kitts and Nevis, Saint Lucia, and St. Vincent and the Grenadines are the seven countries.
Pilot CBDCs are already being tested in a few countries.
India’s government has announced that a “digital rupee” will be introduced by 2022-23. Nirmala Sitharaman, India’s finance minister, had made the announcement in February 2022. The Reserve Bank of India (RBI) will back this. Currently, it’s under development status.
According to the finance minister, the CBDC would strengthen India’s economy, increase efficiency and lower expenses of the country’s currency management system, and provide a stable, regulated digital currency that will compete with private cryptocurrencies.
The announcement came after a series of reports of the RBI banning all private cryptocurrencies from being traded in the country. The Supreme Court of India quashed the RBI order to ban cryptocurrency transactions in March 2020.
In February 2022, the Bank of Russia, Russia’s central bank, announced that it had completed initial trials of the CBDC, also known as the “Digital Ruble”. Two of the banks in the Bank of Russia’s trial group had already connected to the digital currency network and completed a full cycle of “Digital Ruble” transactions between customers using mobile banking apps, stated a release.
The e-krona, a digital currency developed in Sweden, is now being tested. The testing will progress from simulated individuals to an environment with external participants.
In April 2020, China became the world’s first large economy to test a digital currency. The People’s Bank of China wants the e-CNY, or digital yuan, to be widely used in China by 2022.
Following a successful test last year, Jamaican Prime Minister Andrew Holness indicated that the Bank of Jamaica will launch a digital Jamaican dollar in 2022.
Though talks have been on since 2020, the Bank of Canada still does not have a concrete timeline for the launch of its CBDC. It’s in development status.
The CBDC here is under research status. In March 2022, the Joe Biden administration signed an Executive Order to promote responsible innovation in the field of digital assets.
While keeping CBDC under the research status, the UK administration doesn’t yet provide a timeline. Nor does it guarantee the application of CBDC in the future.
This, too, is under research status. The Central Bank of Mexico plans to launch a CBDC by 2024.
The administration had announced its plans for a CBDC way back in April 2019. It has set a timeline till 2025 to issue a CBDC.