Countries are speeding up preparations for central bank digital currencies. Who will be the first to hit the line in the race against time?
In the past year, countries including China, Japan, the United Kingdom, and the United States have accelerated the development and deployment of central bank digital currency (CBDC). Although most of them are still in the testing stage and have not yet been successfully implemented and rolled out on a large scale, the competition is extremely fierce!
Entering the third quarter, many countries have released the latest news about central bank digital currencies:
1. China
On July 8, Didi, Meituan Dianping and Bilibili (Bilibili) have all cooperated with a number of banks participating in digital currency projects. Among them, Meituan Dianping will try to expand usage scenarios such as Meituan bicycles, while the cooperation between Bilibili and participating banks has entered the stage of technology development. In addition, companies such as ByteDance are also discussing the possibility of cooperation with banks.
According to the strategic cooperation agreement reached by the Central Bank’s Digital Currency Research Institute and Didi Chuxing, the two parties will jointly research and explore the scenario innovation and application of digital renminbi in the field of smart travel, and promote the platform ecological construction of digital renminbi in diversified travel scenarios. At the same time, the Digital Currency Research Institute of the People's Bank of China recently released the "Digital Research Rising Star Program" internship and employment recruitment, recruiting interns in Beijing, Shenzhen, and Suzhou.
2. Japan
According to Jinshi News on July 20, the Bank of Japan established a digital currency group to further study the central bank’s digital currency, which shows that Japan is also accelerating the research and development and deployment of its own central bank’s digital currency.
In early July, the Bank of Japan released the Bank of China Digital Currency Research Report again, and discussions on technical issues have begun. On July 1, the Bank of Japan released the research results of "Technical Issues Regarding Bank of China Digital Currency Should Have the Same Functions as Cash". At the end of the report, the Bank of Japan wrote:
"It is necessary to accurately understand the needs of the whole society for central bank funds. In the context of the digital society, it is necessary to deepen the discussion of the role that central bank funds should play from various angles. The Bank of Japan's policy for CBDC is: will pass the experimental Ways to verify its technical feasibility, and will cooperate with overseas central banks and relevant departmental organizations to conduct a series of discussions around CBDC.”
3. Europe
In early July, Panetta, the executive member of the European Central Bank, stated that the central bank's digital currency may have an impact on monetary policy, and the European Central Bank is a pioneer in exploring the possibility of the central bank's digital currency plan. The euro's global potential has not yet been fully realized, but the right policies can.
In addition to the immediate impact of the crisis, the acceleration of the digitization of monetary policy could have implications for the global status of the euro. Central bank digital currency will have an impact on the euro in areas such as monetary policy, financial stability and payment systems, and requires a thorough assessment. If central bank digital currency is allowed to be used outside the euro area, it is likely to have an impact on the global currency and financial system. Influence.
4. United Kingdom
On July 14, Bloomberg and other media reported that Bank of England Governor Bailey said that the central bank is evaluating whether it should establish a digital currency backed by the central bank.
Bailey said: "The question we're looking at is, should we create a BoE digital currency? We will continue to study it because it has huge implications for the nature of payments and society. I think in a few years, we will be heading towards some kind of digital currency.
5. South Korea
On July 13, according to Korea Financial News, the Bank of Korea announced the establishment of a central bank digital currency legal advisory group. The legal team will cooperate with the Bank of Korea until May 2021. The Bank of Korea is determined to accelerate the pace of central bank digital currency research and establish a legal and technical basis for possible CBDC issuance, allowing it to respond more flexibly to the rapidly changing global payment environment.
The legal team will study legal obstacles that may hinder the issuance of the digital won, such as reviewing legal issues related to central bank digital currencies and legal revision requirements. Preliminary research topics and progress are expected to be announced in the second half of 2020.
6. Thailand
On July 16th, the Central Bank of Thailand (BOT) has deployed the central bank’s digital currency and has begun to use digital currency to conduct financial transactions with some large enterprises. The bank has entered the third stage of digital baht development and plans to expand to more business.
According to reports, the BOT plans to test the digital currency for trading with the Hong Kong Monetary Authority in September 2020. Separately, Thailand’s central bank is also considering extending the use of the digital baht to the general public to reduce the cost of financial transactions. At the same time, the Bank of Thailand hopes to learn from China's reliable CBDC experience.
7. Lithuania
According to a Reuters report on July 2, Lithuania will officially launch the central bank’s digital currency LBCoin on July 23. It is produced based on blockchain technology and is part of the Lithuanian blockchain technology and digital currency pilot project. The price of a group is sold at a price of 99 euros (about 781 yuan), and 24,000 pieces will be issued.
However, the Central Bank of Lithuania clarified that LBCoin is not legal tender and can only be exchanged for physical collectible coins, or exchanged with other collectors, or sent as gifts or transferred to public NEM wallets, and discourages their use as a means of payment. Therefore, Lithuania is equivalent to using commemorative coins to conduct a central bank digital currency experiment.
8. United States
In early July, David Treat, senior managing director of Accenture, head of global blockchain, and co-head of the digital dollar project, said that once the project is approved to start, the United States may quickly enter the central bank's digital currency pilot.
In response to a reporter's question "When will we see the Federal Reserve have its own CBDC pilot", he expressed the hope that there will be one soon, and said, "From the moment you start, within a few quarters, you can be in the real world. It's easy to imagine having a real working use case in the world where people can exchange tokens in some context using a wallet on their phone. So the first pilot use cases can be done in a few months and a few quarters, It doesn't need to take years or more."
Summary: The central bank's digital currency is the digitization of the legal currency and the intelligent operation method. It needs to be included in the unified management of the total amount of legal currency. In essence, it still belongs to the unified sovereign (legal) currency of the country. Therefore, its internationalization and competitiveness depend on Based on the comprehensive national strength of the entire country and the international competitiveness of the central bank's digital currency system, it is not that whoever launches the digital currency first will be able to dominate the new world digital currency system.
But what is certain is that in the second half of 2020, the competition around the central bank's digital currency will be exciting.
