The world of cryptocurrencies is expanding by the minute and no one wants to miss the opportunity to get in. However, this was not the attitude of most countries that were planning to introduce a national digital currency or CBDC. Europe has been researching the use of such currencies and recently they announced a bill for a digital euro will be proposed as soon as 2023.
Reports noted that EC finance chief Mairead McGuinness officially revealed the EU’s formal consideration of digital euro legislation during a fintech conference on Wednesday. The Commissioner for Financial Service stated,
“Our goal is to table legislation in early 2023. A targeted legislative consultation in the coming weeks.”
The European Central Bank has already begun experimenting with designs and systems for a digital euro. It may present the prototype sometime in late-2023. However, the digital euro will require approvals from Eurozone governors before implementation. In an event where all the governors have given a go-ahead, the digital euro could be ready for issuance by 2025.
The idea of a central bank digital currency [CBDC] is being aggressively researched by most nations. This was not due to the growth of crypto, but the competition of being among the first to monopolize the global economic market through a dominant CBDC. Clearly, the first to launch their CBDC will also amass a great deal of the market.
The ECB released a report on digital currencies last year. The research mentioned that the bank found a use for a digital euro to help lower interest rates, speed up transactional processes and decrease cash use. Similarly, other countries in the Euro-zone were also conducting independent research like Germany that cited skepticism about government-backed digital currencies among people.
On your marks, CBDC, go!
Additionally, Kenya recently opened the floor to public opinion around a digital shilling. The central bank of Kenya saw the potential value of a CBDC in facilitating cross-border transactions but wanted more help from the public in identifying the benefits, risks, and regulatory measures for a CBDC. Kenyans have until May 20 to submit their comments.
Meanwhile, Thailand has already begun implementing regulations for a future retail CBDC. The new study by the Bank of Thailand pointed out that a CBDC needed to be like Cash and non-interest bearing. It also noted that the distributors of CBDC should be intermediaries like financial institutions. Additionally, it was yet to establish limits for converting CBDC. Nevertheless, the country aimed at 2023 to begin testing its CBDC.
It would be foolish to ignore China. It sparked this feeling of competition among many nations. The winter Olympics have already begun and as per China’s plan, this was the time to boost the awareness about its digital currency- e-CNY among the general public along with the athletes that were coming to the country. Reports suggested over 361 million individuals had signed up for digital yuan wallets.