According to AMBcrypto reported on March 6, central governments around the world are currently considering the need for a central bank digital currency (CBDC). All of this is due to China, which was the first country to research and accelerate the implementation of central bank digital currencies.
(Image source: needpix)
Uncomfortable with the progress of China's digital currency, Japanese lawmakers also started discussing the possibility of issuing a digital currency of the central bank. Since 2014, China has been exploring the benefits of central bank digital currencies, and the Bank of Japan (BOJ) has also been actively exploring central bank digital currencies since November 2018.
In fact, other countries, such as Canada, Switzerland, and Sweden, have also joined the competition to develop central bank digital currencies. The central bank members of the three countries also plan to meet in April 2020 to discuss the possibility of establishing their own central bank digital currencies.
Sweden began testing its digital currency project e-krona on February 20, 2020. Similarly, Jerome Powell, chairman of the Federal Reserve, confirmed that the Federal Reserve is exploring the benefits of central bank digital currencies. In addition, European Central Bank (ECB) President Christina Lagarde also recently talked about the central bank's digital currency, and said that the European Central Bank is eager to see the use of central bank digital currency.
However, research on central bank digital currencies is not limited to government agencies around the world. Many cryptocurrency experts are also paying close attention to central bank digital currencies. Vitalik Buterin, the founder of Ethereum, gave his latest opinion.
In a recent Block TV podcast, Vitalik talked about his views on the trend of digital currencies around the world and claimed that digitization is inevitable.
With or without blockchain, digitalization is inevitable. The main challenge for the currency issued by central banks and enterprises is the centralization of rights and centralization of data collection. You need to rely on a potential centralized intermediary to control these systems, and they have the right to determine the participating users.
Vitalik expects that more attractive currencies in the future will be decentralized and private, as it will be able to avoid "centralization bottlenecks". He added:
We have seen a lot of similar situations, even the things that are completely legal will eventually be restricted, because whoever runs the centralized node (checkpoint) just wants to exclude certain categories of users, I think this That's why people will continue to be interested in fully decentralized digital currencies.
On the other hand, a recent report by the Bank for International Settlements (BIS) on central bank digital currencies shows that current digital currency projects in countries around the world are not clearly focused on the cross-border payment field.
The report also states:
As far as cross-border connectivity is concerned, no central bank digital currency project has explicitly focused on payments outside the jurisdiction of the central bank. It is worth noting that several central banks are currently conducting pilot projects on cross-border payments. While developing central bank digital currencies, they have also focused on the consumer experience.
As early as January 2019, the BIS released a report saying that 70% of central banks are exploring how to build mutual trust measures. Although countries have already struggled with central bank digital currencies, no central bank has actually selected a specific issue date. With the acceleration of digitalization in the past few months, the question of central bank digital currency is no longer "whether it will be issued" but has become "when can it be issued".