{"id":265887,"date":"2021-06-03T19:57:45","date_gmt":"2021-06-03T16:57:45","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/the-cbdc-promised-land-as-some-governments-falter-others-press-on\/"},"modified":"2021-06-03T19:57:45","modified_gmt":"2021-06-03T16:57:45","slug":"the-cbdc-promised-land-as-some-governments-falter-others-press-on","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/the-cbdc-promised-land-as-some-governments-falter-others-press-on\/","title":{"rendered":"# The CBDC promised land: As some governments falter, others press on"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3f9b3567c9c\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3f9b3567c9c\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/the-cbdc-promised-land-as-some-governments-falter-others-press-on\/#Whats_hampering_the_adoption_of_CBDCs_globally\" >What\u2019s hampering the adoption of CBDCs globally?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/the-cbdc-promised-land-as-some-governments-falter-others-press-on\/#Not_all_CBDCs_are_created_equal\" >Not all CBDCs are created equal<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/the-cbdc-promised-land-as-some-governments-falter-others-press-on\/#Will_CBDCs_ever_be_interoperable_with_other_digital_assets\" >Will CBDCs ever be interoperable with other digital assets?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/the-cbdc-promised-land-as-some-governments-falter-others-press-on\/#Taking_the_next_step\" >Taking the next step<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># The CBDC promised land: As some governments falter, others press on <\/strong>&#8221;<br \/>\n<img decoding=\"async\" src=\"https:\/\/images.cointelegraph.com\/images\/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMDYvZjJkODA1OWYtZTYzZS00NjVhLTlkYTMtOTFmNGQxNzU1NDk0LmpwZw==.jpg\" \/><\/p>\n<div class=\"post-content\" data-v-5a136f3a>With the crypto market turning up its pace of growth over the last year and a half, the idea behind central bank digital currencies (CBDCs) seems to have gained an increasing amount of traction among many governments and retail banking institutions. In this regard, as per a study recently <a rel=\"nofollow noopener\" target=\"_blank\" href=\"http:\/\/l.firstdag.com\/FIRMEDIUM0042\">released<\/a> by consulting giant PwC, more than 60 central banks have been exploring the unique value proposition put forth by CBDCs.<\/p>\n<p>Furthermore, it bears mentioning that following the dawn of the coronavirus pandemic, the use of physical cash has continued to <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.cnbc.com\/2020\/12\/03\/covid-19-pandemic-accelerating-the-shift-from-cash-to-digital-payments.html\">dwindle<\/a> globally, with many now transitioning to digital payments in order to minimize potential health risks, while others have simply grown accustomed to online shopping. So, there are several reasons why an increasing number of countries may be looking to employ CBDCs, especially because they make it possible for people to facilitate fast, convenient, contactless remittances. But how many nations are actually open to launching such a solution?<\/p>\n<p>To put things into perspective as to how much progress has been made within this space, the People\u2019s Bank of China (PBoC) has successfully tested its digital yuan offering \u2014 also referred to as the Digital Currency Electronic Payment, or DCEP \u2014 across a whole host of major commercial regions including Shenzhen, Chengdu and Suzhou. In fact, the country is reportedly looking to roll out the coin for mass use before the start of the 2022 Winter Olympics. <\/p>\n<p>Similarly, the Bank of Japan has also followed in the footsteps of the PBoC by initiating a yearlong trial of its digital yen as a means of m<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ing out the long-term technical\/monetary feasibility of launching a mass-scale CBDC. The pilot is already live and is set to conclude by the end of the first quarter of 2022.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Whats_hampering_the_adoption_of_CBDCs_globally\"><\/span>What\u2019s hampering the adoption of CBDCs globally?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>At present, it seems as though every other country and major banking institution is interested in creating its very own CBDC. However, it\u2019s hard to determine which of these players are actually serious about adopting this <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/technology\/\" data-internallinksmanager029f6b8e52c=\"4\" title=\"Technology\" target=\"_blank\" rel=\"noopener\">technology<\/a>. Ran \u201cGoldi\u201d Goldshtein, CEO of First Digital Assets Group (First DAG) \u2014 a firm focused on building interoperable payment rails supporting CBDCs and stablecoins such as Diem \u2014 pointed out to Cointelegraph:<\/p>\n<blockquote><p>\u201cI think most countries are serious about CBDCs, to the extent that there is always a core group of people leading local projects. That being said, when looking at various countries, they have different progression skews. I believe these countries differ due to several factors such as governance, public sentiment, etc.\u201d <\/p><\/blockquote>\n<p>Providing his thoughts on why CBDCs have not been able to enter the financial mainstream, Goldi believes that adoption has been hindered due to a plethora of reasons, including there being too much red tape. In this regard, one can see that in countries like China, Singapore and Korea, where the local governments are quite proactive in promoting the use of future-ready technologies, these novel digital assets have been able to gain a lot of attention.<\/p>\n<p>Additionally, another reason that many countries have not been able to fulfill their CBDC aspirations could be because of the economic devastation caused by the coronavirus pandemic, which basically put the financial plans of most counties at a standstill. As a result, the interest that nations previously had has waned. \u201cWe heard a lot about CBDCs around 2016\u20132018, and then, as crypto winter hit all of us in 2019, everyone went silent, as it wasn&#8217;t \u2018cool\u2019 to dabble with digital currencies anymore,\u201d Goldi added.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Not_all_CBDCs_are_created_equal\"><\/span>Not all CBDCs are created equal<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>There are several ways that CBDCs may be built and implemented, and according to Gerald Votta, director of communications for Quantum Economics, the technological aspects of CBDCs can differ greatly. As he told Cointelegraph, \u201cMany of these digital fiat currencies are being designed based on Tether and USDC, the largest stablecoins in existence.\u201d<\/p>\n<p>Furthermore, he added that any government or central authority looking to build a centralized version of a CBDC could potentially be setting themselves up for economic failure, stating that such systems tend to routinely be compromised \u2014 citing the recent <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">Facebook<\/a> data breach as an example of a similar situation. \u201cThis could be a serious issue if the information compromised involves your country\u2019s monetary supply,\u201d Votta opined.<\/p>\n<p>On a more technical note, different CBDCs employ different architectural designs. For example, some make use of time-tested frameworks where the flow consists of the central bank, then a retail bank\/financial institution, then the consumer; whereas others opt for a more direct approach where the central bank is the only entity allowed to mint, burn and distribute the funds.<\/p>\n<p>That said, the technology underlying most of these projects, at least the ones that are further along in their life cycle, is mostly the same. \u201cA majority of all mature projects in existence today involve the use of R3 Corda and Bitt Inc,\u201d Goldi pointed out. R3\u2019s Corda platform is an enterprise-level blockchain solution, while Bitt Inc. is a payment systems company.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Will_CBDCs_ever_be_interoperable_with_other_digital_assets\"><\/span>Will CBDCs ever be interoperable with other digital assets?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Another pertinent question worth delving into is whether CBDCs will ever reach a point in their evolution, overcoming one of the main challenges presented by fiat money, where people will be able to use them to facilitate cross-asset transactions \u2014 for example, completing payments between stablecoins and CBDCs, such as Tether (USDT), USD Coin (USDC), the DCEP and the Bahamian Sand Dollar.<\/p>\n<p>Goldi believes that in a decade or so, there will be automatic relays and payment gateways that will be able to take care of any conversion\/transfer-related processes that need to be completed between most CBDCs, highlighting the fact that the infrastructure setup required to achieve this goal is fairly simple and straightforward.<\/p>\n<p>In fact, there are already quite a few unique products on the market today that help fulfill this vision, albeit in a slightly different manner. For example, First DAG processes payments on behalf of merchants that wish to receive cryptocurrencies, allowing them to gain increased financial exposure.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Taking_the_next_step\"><\/span>Taking the next step<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Recently, a lot of positive developments surrounding CBDCs have emerged. For example, after a few months of little to no progress, Sweden\u2019s central bank, the Riksbank, published the results of the first phase of its e-krona pilot project.<\/p>\n<p>Not only that, but over the course of the last couple of years, countries like the Bahamas and Cambodia have released their own CBDCs: the Sand Dollar and the Bakong, respectively.<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>Rolling up the sleeves: China\u2019s tech giants drive digital yuan adoption<\/em><\/strong><\/p>\n<p>That being said, the adoption of the Sand Dollar \u2014 as well as most other similar offerings \u2014 has been slow. This issue has not gone unnoticed, and most governments across the globe have recognized the pertinent risks involved with going all-in on a large-scale CBDC project.<\/p>\n<p>Therefore, it will be interesting to see how determined governments will be to continue in their pursuits of a functional, well-integrated CBDC, especially as China\u2019s highly touted DCEP project gets ready for mainstream deployment. If successful, it stands to reason that an increasing number of countries will follow in the country\u2019s footsteps and mint their very own CBDCs.<\/p>\n<p><template data-name=\"subscription_form\" data-type=\"markets_outlook\"><\/template><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/the-cbdc-promised-land-as-some-governments-falter-others-press-on\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# The CBDC promised land: As some governments falter, others press on &#8221; With the crypto market turning up its pace of growth over the last year and a half, the idea behind central bank digital currencies (CBDCs) seems to have gained an increasing amount of traction among many governments and retail banking institutions. In&#8230;<\/p>\n","protected":false},"author":1,"featured_media":265888,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMDYvZjJkODA1OWYtZTYzZS00NjVhLTlkYTMtOTFmNGQxNzU1NDk0LmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[75046,4973,70934,5012,72420,4965],"class_list":["post-265887","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-cbdc","tag-china","tag-regulation","tag-singapore","tag-south-korea","tag-technology"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/265887","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=265887"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/265887\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/265888"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=265887"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=265887"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=265887"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}