Previously, we have featured articles on the adaptation and exploration by some states on having their own CBDC, which featured big countries including China, South Korea and the US. Almost every part of the globe has already joined the wave, and recognizes the innovative opportunity that CBDC has to offer. Today, let’s take a look at the new countries that are exploring CBDC.

Rwanda

Of the African countries, Rwanda is the latest country to join the exploration of CBDC. According to John Karamuka, Director of Payment Systems at the Central Bank. the implications this will offer, will give the Rwandese financial stability. The country is now exploring the benefits CBDC would have, in terms of their economic, financial and technical aspects.

However, the study shows a lack of global standards and reliable benchmarks for the subject; but Karamuka explained that they are evaluating countries that are at more advanced stages, by learning both positive and negative experiences. Furthermore, Norbert Haguma, Chairman of the Rwanda Blockchain Association, proposes the consideration of key elements, including financial inclusion and the CBDC’s scalability.

Nigeria

Recently, the Central Bank of Nigeria (CBN) reached an agreement to limit the use of cryptocurrency in the banking sector, by implementing a regulatory penalty on businesses that service cryptocurrency exchanges or transactions. It has been reported that Nigerian officials are getting ready to embrace blockchain technology, and have been exploring the CBDC concept for the last two years. This will make the remittance transfer easier. It is expected that before the year ends, they will make a special announcement on when it will be launched.

Israel

According to a report, the Bank of Israel is currently working on its digital currency. The Deputy Governor of the bank, Andrew Abir, announced that the financial institution had begun conducting an internal pilot program for a Digital Shekel.

Since the publication of a working paper by the central bank, there is now a < 50% chance of launching the country’s own digital currency, which shows a probable increase from last’s year 20% mark. The Bank of Israel has not made any official statement on its website yet, but last month, the financial institution indicated that they are now drafting an action plan to uncover the advantages CBDC could have on the country’s economy.

France

Meanwhile, in Europe, the Bank of France continues with the tests and trials, after a successful experiment involving the use of CBDC to settle listed securities. “We are delighted to have led the successful completion of this experiment with the Banque de France,” said the Head of Digital Corporate Finance, Matthew Alexander.

A test, which will continue until the middle of 2021, is planned. Earlier this month, the central banks of France and Switzerland reportedly joining forces, along with the Bank for International Settlements, to test wholesale central bank digital currencies in cross-border transactions.

Europe

In April 2021, the European Central Bank conducted a survey and raised a privacy concern among the respondents regarding digital currency. As reported, the Federal Reserve is looking forward to the CBDC project. In addition, the UK task force is in charge of “monitor[ing] international CBDC developments to ensure the UK remains at the forefront of global innovation”.

At present, the Eurozone is moving forward, and has taken the lead over others, since Fabio Panetta, a member of its executive board, attended a hearing in the European Parliament, which gives it an edge in terms of engaging the public. The ECB determined that growth in online digital payments only seems set to surge, so they are still drafting their action plans.

The Caribbean

This year, the Eastern Caribbean Central Bank (ECCB) started its central bank currency pilot, called DCash. The Eastern Caribbean Currency Union is composed of eight islands, but the pilot will only cover four of them, Antigua and Barbuda, Grenada, Saint Christopher (St Kitts) and Nevis and Saint Lucia. Public constituents can now use the app openly. DCash can only be accessed via smartphones, which makes it efficient for users.

Every central bank around the world has individual purposes, different motivations and its own criteria regarding the CBDC. The digital currency of the Eastern Caribbean is set to transform its economy through innovation.

India

India’s government may introduce its Digital Rupee to the public, in order to to promote improvement in efficient cashless payments. The proposed Digital Rupeewill be issued by the Reserve Bank, and it has been approved as legal tender by the central government. The Digital Rupee is set to coexist with the private sectors, such as the UPI payment infrastructure and fintech companies.

The United States

In the recent Senate hearing, Mr Giancarlo, founder of the Digital Dollar Project, communicated that they will be initiating five pilot programs to analyze CBDC, over the next twelve months. The Feds are also continuing with their research and are expected to provide initial finds and public trials in the last quarter of this year. US lawmakers included the CBDC initiative in the Bipartisan Bill, which would require the US Treasury secretary to publish reports on any updates about the research and study of CBDC. Up to this day, arguments in favor of CBDCs vary, and the discussions around it continue.

China

As the leading country in CBDC, China is currently distributing its digital yuan to its people. The last report was about testing it in some major cities, including big companies like Alibaba’s Ant group. Some banks are now creating digital wallets for their clients, according to a report and the citizens of China are in the process of embracing their own digital currency.

In Conclusion

More and more countries are now supporting Central Bank Digital Currency, or CBDC, as they continue to explore this avenue, and trials are set to ensure efficient usage in the future. Some are studying the implementations and trials of others, as to what will work out in their own digital currency. Innovations like this should provide convenience, privacy and security, and they should also promote a wider financial ecosystem that sums up the reason for creating CBDC.