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In this digital world, countries are now taking the step to digitize their monetary ecosystem with the creation of a Central Bank Digital Currency (CBDC).
A CBDC is a country’s fiat currency in the form of a digital asset, and would be controlled by the nation’s monetary authority..
Across the world, only 2 nations currently use a CBDC, with the Bahamas’ ‘Sand Dollar’ launching in 2020 and Nigeria’s ‘e-Naira’ in October of Y 2021.
Despite just 2 countries having a CBDC in place, many others have either begun research on 1 or are in the final stages of rolling it out this yr.
China seems to be ahead of the pack with plans to release its ‘e-CNY’ digital currency by February.
The People’s Bank of China (PBoC) announced the news in September, and pilot testing of the digital currency had already taken place in cities such as Shenzhen, Shanghai, Hainan, Changsha and, Dalian.
The e-CNY can be used to purchase goods online and offline, as well as pay electricity bills, tolls, and transport fares, according to the PBoC.
China’s history with cryptocurrency is well documented and pilot testing of the CBDC showed how widely used it was by Chinese citizens with the e-CNY used to conduct 62-B RMB Yuan ($9.7-B) of transactions by the end of October 2021.
One of the leading nations in Bitcoin mining, Kazakhstan has completed a prototype of a digital tenge platform and will decide whether to fully launch its CBDC by the end of Y 2022.
A pilot CBDC project is in preparation, according to the Governor of the National Bank of Kazakhstan, with local financial companies and some international partners to be involved in the pilot testing.
The central Asian nation had attempted the centralisation of cryptocurrency earlier this year and its potential CBDC will give the government more control in the regulation of financial transactions.
Similar to Kazakhstan, a pilot testing of Russia’s digital ruble will launch in early this year.
Bank of Russia Governor Elvira Nabiullina confirmed the news last month, and said the pilot program would decide whether the digital ruble will be launched or scrapped.
There has been criticism of the digital ruble with concerns over fraudsters and hackers being able to access the blockchain-based currency.
The Central Bank of Brazil announced plans to start a pilot program of a digital currency this yr with Y 2024 earmarked as the yr the final version of a ‘digital real’ will be launched.
Brazil may be behind its competitors in being the first to launch its CBDC in the upcoming year, but they may be the most likely to officially launch it due to the nation’s acceptance of cryptocurrency and the digital economy.
According to the Brazil Central Bank, Brazilians acquired $4.27-B in cryptocurrencies in Y 2021.
Have a prosperous day, Keep the Faith!