The rise of cryptocurrencies has driven central banks to attempt a similar – digital – approach to monetary policy. Jamaica just announced it successfully tested its CBDC, and several other nations are ready to launch theirs.
CBDC stands for ‘Central Bank Digital Currency’ – a country’s fiat currency in the form of a digital asset, which, unlike cryptocurrencies, is controlled by the official monetary authorities – usually central banks. So far, only two countries in the world use a CBDC (The Bahamas and Nigeria). However, other nations have been working on a CBDC release of their own.
In the most recent development, the Bank of Jamaica announced on Monday it has successfully completed a trial of its digital currency. The eight-month pilot project began in May and ended on December 31. The country is now set to roll out its CBDC in the first quarter of 2022.
The People’s Bank of China (PBOC) was also busy prepping its e-CNY digital currency, announcing the project in September 2021 with plans to release the e-coin by February. The e-CNY was tested in five cities, including Shanghai, and conducted $9.7 billion worth of transactions. It is designed to be used for online and offline shopping, as well as paying electricity bills and transportation fares, according to the PBOC.
Bitcoin-friendly Kazakhstan has made a prototype of a digital tenge platform and could launch its CBDC by the end of the year, as pilot testing is yet to start, Coin Rivet reports.
Russia is ready to launch pilot testing of the digital ruble in early 2022, media reports state, citing Bank of Russia Governor Elvira Nabiullina. Last month, she said the pilot program would show whether the blockchain-based digital ruble will be launched or scrapped, as there are concerns that hackers might be able to access it.
The Central Bank of Brazil (BCB) is also set to test its ‘digital real’ this year, but so far, is planning to launch the currency for public use no sooner than in 2024. Analysts say the crypto-friendly nation has a good chance for a successful CBDC launch. Brazilians acquired $4.27 billion in cryptocurrencies in 2021, BCB figures show.
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