Faced with cryptos, governments are working on CBDCs! Despite the bad crypto situation at the moment, very few people question the future of cryptocurrencies. Indeed, whether we like it or not, cryptos will settle permanently in the economic landscape.
Crypto applications and utilities will diversify more and more. Faced with this success, governments are reacting. Many are working on a CBDC project. Zimbabwe and Russia have just communicated the latest information on their CBDC project.
What is a CBDC?
The term CBDC is an anglicism which means “Central Bank Digital Currency”. In French, a CBDC can therefore be defined as an electronic currency managed by a central bank. A CBDC is therefore an electronic currency in the same way as a crypto . Some CBDCs will operate using blockchain technology, others will not.
On the other hand, the fundamental difference is that a CBDC remains entirely managed by a central bank as is currently the case with the classic fiat currency.
Many countries around the world are working on CBDC projects. The electronic euro (or e-euro) or the electronic dollar are thus in the study phase. China, on the other hand, is much more advanced with its electronic yuan which is already in the experimental phase.
In total, more than 80 countries have a CBDC project in the pipeline. As of March 2022, 9 countries have already officially launched their CBDC:
- The Bahamas;
- Antigua and Barbuda;
- St. Kitts et Nevis ;
- Montserrat;
- Dominique ;
- St. LUCIA ;
- St. Vincent and the Grenadines;
- Grenade ;
- Nigeria.
Now let’s talk about two countries in particular that have just provided an update on their CBDC project: Zimbabwe and Russia.
“The adoption of a CBDC” in Zimbabwe
Things are moving fast in Zimbabwe! Indeed, barely 6 months ago, the Central Bank announced its intention to develop a CBDC. However, according to his statements, the roadmap is now tied up! As a reminder, the government decision to work on a CBDC project dates back to November 2021.
For the moment, the Bank has just launched a public consultation on the subject of the CBDC. As a basis for the consultation, the Bank has just drawn up a detailed paper which resembles a white paper. Comments will be collected within 90 days of publication of the document.
“The role of stakeholders in the CBDC journey is paramount and in this regard, the Bank has developed a public consultation document on CBDCs which will be published shortly. The consultation document aims to foster a broad and transparent public dialogue regarding the potential benefits and risks of CBDCs." John Mangudya, Governor of the Central Bank of Zimbabwe.
Russia: a CBDC by 2024?
Different country but same project! The Central Bank of the Russian Federation (CBR) has just released details about its CBDC. The Bank has published a document which establishes the main priorities of its monetary policy over the next 3 years.
However, among the listed objectives, we find “the introduction of a digital version of the national fiat currency”.
Mean by this, the introduction of a CBDC, an electronic ruble.
“In 2024, the Bank of Russia will begin to gradually connect all credit institutions to the digital ruble platform and increase the number of payment options and transactions available using smart contracts." Central Bank of the Russian Federation (CBR).
Full implementation of the electronic ruble is planned by 2025 . However, we will not have to wait until 2025 to see the first uses of the digital rouble. Indeed, the government intends to accelerate the process of integrating its CBDC.
The reason? For some, western sanctions following the war in Ukraine would have forced the government to speed up. A precise roadmap is thus expected by the end of 2023.
In addition, the Central Bank of the Russian Federation (CBR) is working on full- scale tests in April 2023.
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