It is hard to imagine that just two years ago, public discourse about central bank digital currencies, or central bank digital currencies, focused primarily on the potential and feasibility of issuing them. Even in 2019, the question was whether we need government cryptocurrencies, as only 70% of central banks around the world are exploring the possibility of issuing digital currencies for digital currencies, according to a study published by the Bank for International Settlements in early 2019. But This year, things are really different.

The year 2020 kicked off with a major event in the financial world: the World Economic Forum in Davos, where the World Economic Forum released a toolkit for decision-makers regarding the creation of the CBD. And according to a recent report by the Bank for International Settlements (BIS), 80% of the world’s central banks have already rated CBDC accreditation. The news that central banks around the world started actively investigating, studying, testing, etc., continued to arrive every month this year: Australia, Brazil, Cambodia, Estonia, Jamaica, Kazakhstan, Kenya, Lithuania, Russia, South Korea and Sweden. And Thailand and the United Arab Emirates, to name a few. Even Japan, which two years ago was a major critic of the central bank’s digital currency, has changed its mind.

While the inevitability of the central bank’s digital currency turning into a global phenomenon has become evident this year, an important trend is also becoming evident: Central banks in emerging market economies are moving to issue central bank currencies faster than developed countries, which are operating. More cautious. … … for example, the European Central Bank is discussing starting the digital evaluation phase for the euro next year, and launching the digital euro is at least a five-year plan. Canada is also developing CBDC currencies at a “good pace”, according to Timothy Lin, deputy director of the Bank of Canada. It will take many years to issue the Japanese digital yen, and the Bahamas has become one of the first countries in the world to officially launch a central bank digital currency in the fall, according to a former Bank of Japan employee. Russia is expected to launch the first experimental projects of its digital ruble next year.

The situation is very different in the world’s largest economies, the United States and China, where technological competition led to the “digital cold war”. The Chinese digital yuan project, called Digital Currency Electronic Payments or DCEP, has a long history indeed, and the project has made great progress this year, although many details remain limited. Concerns began about the digital dollar issuance of the general digital yuan, and the Digital Dollar white paper soon followed. The talk about this technological competition between the two countries has been presented to the US Senate. Some even argued, controversially, that the 2020 US election sealed China’s victory in the leadership of the Convention on Biological Diversity. However, the question of whether being the first to launch a central bank digital currency is sufficient to gain global reserve currency status remains open. More importantly, China does not intend to replace the US dollar with the digital yuan, and the cooperation efforts between the two leading powers to develop the central bank’s digital currency may be the best option for the world.

There may be many reasons for such a rapid development of the digital currency of central banks around the world, but the main reason is the COVID-19 pandemic, which the European Central Bank, the Bank for International Settlements and many other experts have taken care of. The coronavirus pandemic, which has spurred human technology development over the next 20 years at least, has posed a major challenge to the global economy, and CBD is beginning to be seen as an appropriate tool to reform the financial system.

On the topic: How has the COVID-19 pandemic affected the crypto space? Expert response

While some of them express serious concerns about privacy in central bank currencies and assert that they will be a step towards a more centralized system, the potential of national digital currencies has undoubtedly become our current reality, and not just the future economic system. Central bank digital currencies are a major step in developing the financial system, as they can improve bank accounts, completely change the traditional economy, change the global economy, change the way we think about money and how it is used by replacing cash, and even becoming part of the new monetary system. “As the year draws to a close, Cointelegraph is reaching out to experts in the blockchain and crypto space industries to get their views on the impact of CBDC on the crypto space and beyond.

How has the development of the CBDC cipher space affected this year and what can we expect in 2021?

Brian Bellendorf, CEO of Hyperledger:
“The level of knowledge of the technical groups of the central bank, especially with regard to central bank digital currencies, their capabilities and limitations, will surprise many in the crypto community who think otherwise.

Source: CoinTelegraph