China will promote central bank digital currency research and development, and countries are ready to go?

China will promote central bank digital currency research and development, and countries are ready to go?

Among them, the more positive ones are Uruguay, Ecuador and other countries, which have already piloted CBDC on a limited scale. Many countries, including China, Sweden, and the Bahamas, are actively exploring and experimenting. The governor of the Bank of Thailand also said that Thailand is experimenting with the central bank's digital currency to improve the efficiency of liquidation between banks.

Also. Some central banks support private sector legal digital currencies (DFCs) under the regulatory sandbox regime, such as Barbados and the Philippines.

Although many countries have a positive attitude toward the issuance of central bank digital currency, many countries still have a negative attitude towards the central bank's digital currency.

The Bank of Korea’s report clearly stated that there is no need to issue CBDC at this stage. Once issued, it will not only affect central bank services such as monetary policy, but also affect the entire financial market.

The German central bank, for the same concern, temporarily disregarded the issuance of central bank digital currency. It warned that the use of central bank digital currency would have serious consequences and could undermine the stability of the financial system.

The European Central Bank said that the euro system does not currently have a convincing motivation to issue CBDC.

Different central banks have different views on CBDC. Some developed countries hope to seek alternatives to cash in the case of a decline in cash usage frequency through CBDC. For emerging economies such as developing countries, the main purpose of CBDC is to reduce bank costs while improving efficiency.

Those countries that are unwilling to implement CBDC believe that under the existing financial system, once CBDC is issued, it will undermine the current financial system and affect the stability of the financial system.

Nonetheless, after Facebook’s cryptocurrency Libra, many central banks have significantly accelerated the pace of research on CBDC. As the International Monetary Fund (IMF) said, central banks may issue central bank digital currencies in the future. (Coin World)

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