If you follow the cryptocurrency markets closely, you may have noticed that a number of countries have recently taken steps to issue central bank-backed digital currencies. South Africa, Thailand, Brazil, and China all have digital currencies in the works, and each appears to be moving forward at a different pace.
Since last week, we have seen South Africa, Thailand, Brazil, and China take steps forward in regulating and addressing cryptocurrency and blockchain technology.
In this article we discuss the latest developments in the controversial cryptocurrency business model known as a decentralized banking coin or CBDC. First, South Africa has passed a bill that aims to allow the country to issue a CBDC. Thailand has announced the launch of their own CBDC, and the program has has reportedly been delayed. Brazil is moving forward with their own CBDC, but the new law has not yet been approved. Finally, China has passed a bill that defines which cryptocurrencies will be allowed to operate as a CBDC.Central bank digital currencies (CBDCs) will become the norm in the near future. Once the first large machines come off the line, more will follow en masse. While it seems that China will be the first to launch, other smaller countries are also preparing for this inevitability.
Efforts to establish a CBDC in South Africa are officially underway. A few days ago, the Reserve Bank of South Africa (SARB) announced that it had begun a study on the feasibility, desirability and practicality of a central bank digital currency (CBDC). While this is an interesting first step, the Bank clarified that this feasibility study does not constitute a commitment to issue CBDCs and that no final decision has yet been made. The study, which is expected to last until 2022, will examine how the CBDC issue will affect
- Safety and risk management
When all these elements come together, the bank envisions a future CBDC that offers the best features of both cash and electronic payments.
While the Reserve Bank of South Africa has just launched a feasibility study, the Bank of Thailand (BoT) has already taken the next step in the design phase. At this stage, Giesecke+Devrient, a German technology company, will be responsible for creating what the Bank of England wants. According to recently released documents, the Bank of England has allocated approximately $320,000 for this phase of its operations. Although Thailand is ahead of other countries considering CBDCs with this initiative, it will be years before the product is officially released. When initially announcing its intentions, the Council indicated that it had set a timeline of 3 to 5 years for the project.
In recent months, Brazil’s central bank, Banco Central Do Brasil (BCB), has considered issuing CBDCs. The bank has now officially released a list of guidelines to be followed in any launch. Here are some of the important points in the manual.
- Ability to conduct online and possibly offline transactions
- Issuance of BCBs as an extension of physical money, with distribution to the public by SFN and SPX depositories.
- Not to be a percentage
- ensure the legal certainty of its activities
Interestingly, the BCB notes that it needs to deepen the discussion on this issue, including by engaging in a dialogue with the private sector. It is not clear what form this dialogue will take: will the BCB use existing custodial solutions? Include existing code from previously created currencies? Et cetera.
As a pioneer among major countries developing their own CBDCs, China’s central bank, the People’s Bank of China (PBOC), has reportedly conducted its third real time test. While other countries are still considering the need for CBDCs, China believes they are worth developing and implementing. The next trial will take place in the city of Beijing. Previous tests were conducted in Shenzhen and Suzhou. Like the first two tests, the final test will be based on a lottery in which 200,000 applicants/residents of Beijing will win about $31 each. The lucky winners can spend the money via the mobile app at participating stores. Once the PBOC has conducted the necessary testing, the final product/CBDC should be called e-CNY.I’m pleased to announce that the number of businesses, individuals, and investor groups using the CBDC in South Africa, Thailand, Brazil, and China has all grown by at least 50% in the past month. This confirms my belief that the CBDC is the beginning of the next great economic revolution, for which the world is wide-open.. Read more about south african banks and bitcoin and let us know what you think.
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