Digital Yuan

May 03 2021

Accenture and Digital Dollar Foundation to trial United States CBDC this year

Fortune 500 company Accenture has teamed up with Digital Dollar Foundation to conduct Central Bank Digital Currency, or CBDC, trials in the United States.

Announced on Monday, May 3, the newly formed Digital Dollar Project will carry out five CBDC pilot programs over the next 12 months. The project’s objective is to generate data to inform U.S. policymakers on how to develop a domestic digital currency.

The Digital Dollar Project will launch three pilot programs in the next two months, generating data on the functional, sociological, and business benefits of a digital greenback.

Al Jazeera reports that former chair of the Commodity Futures Trading Commission and co-founder of the Digital Dollar Foundation, Christopher Giancarlo, emphasized the lack of U.S. data regarding CBDC:

“There are conferences and papers coming out every week around the world on CBDCs based on data from other countries. What there is not, is any real data and testing from the United States to inform that debate. We’re seeking to generate that real-world data.”

However, the Fed is taking a cautious approach as the guardian of the world’s reserve currency, the report added, with chairman Jerome Powell responding that it is far more important to get a digital dollar right than it is to be fast.

Giancarlo countered that Powell was correct to be cautious, but warned that the U.S. could fall further behind as China pushes ahead with its own CBDC testing and deployment.

While the U.S. Federal Reserve has been conducting research into the technology and applications for a CBDC, the United States lags behind the digital currency initiatives currently ongoing in numerous other jurisdictions.

China’s central bank and leading state banks have recently been preparing to test the digital yuan for a shopping festival on May 5.

Accenture has also worked on a number of CBDC projects in other countries, including Canada, Singapore, France, and Sweden — which has already completed the first phase of its pilot.

According to a study by the Bank for International Settlements, 80% of the world’s central banks are already researching central bank-issued digital currencies.

Accenture and Digital Dollar Foundation to trial United States CBDC this year

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Apr 05 2021

ECB’s Christine Lagarde Discusses Timeline for Digital Euro

European Central Bank’s (ECB) chief Christine Lagarde said that the possibility of a digital Euro, known more technically as central bank digital currencies (CBDCs), coming into circulation is growing given the change in digital priorities.

But it could still take the European Union sometime before it decides on moving forward with the idea.

CBDC Roll-out Process Is Complicated

In an interview with Bloomberg TV, Lagarde pointed to the intricate processes needed for a decision to be made towards launching a digital Euro. According to her, there is a possibility that a state-backed digital currency could come into existence in the next couple of years once the Governing Council gives the go-ahead.

The ECB would first release an analysis of eight thousand responses it received following its digital Euro consultation exercise. According to the French business guru, these responses would first be communicated to the European Parliament, a key player. Then the ECB’s decision-making Governing Council would decide whether to proceed with the fiat replica experimentation.

The consultation results would determine whether the ECB would commence experimentation on a digital fiat in the next six months or a year.

“It’s a technical endeavor as well as a fundamental change,” Lagarde said. “We need to make sure that we’re not going to break any system, but to enhance the system,” she added.

Lagarde’s enhancement speech echoes the Bank for International Settlements (BIS) report, which noted that over 20% of national banks globally actively considered rolling out a state-sanctioned digital currency. The report published in late 2020 recommended that any efforts in this direction should not usurp the fundamental role that fiat plays in the economy. According to the BIS, CBDCs should be integrated into the extant settlement framework.

Four Years At Most

But despite this supposed positive outlook for CBDCs, Lagarde has said it may take up to four years before anything meaningful comes out.

The CBDC race is led by China, which is currently fast-tracking the digital yuan pilot tests to meet up to the Winter Olympics in Beijing. But China is not the only country that has made efforts to revolutionize the way people spend cash. The Bahamas is the first recognized economy using a state-backed digital currency called Sands Dollar, and Lagarde says she is keenly interested in this project.

According to her, any decision on CBDCs would be targeted at providing Europeans with a fairly stable, safe, and secure digital currency, given the immense shift it would bring to the European financial scape.

Lagarde is a well-known critic of Bitcoin being perceived as a medium of exchange.

Noting the potential harm the digital asset may bring to the financial system, Lagarde said the pseudonymous nature of Bitcoin could serve criminal intents like money laundering and terrorist financing.

To many like her, the CBDC is a concept to regain the financial system disruptively usurped by decentralization.

ECB’s Christine Lagarde Discusses Timeline for Digital Euro

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Jan 18 2021

China’s BSN to Launch Global CBDC Payment System Beta in 2021

China’s lead in the race for developing a Central Bank Digital Currency (CBDC) is unassailable at this point. The country is making further progress, with the government’s blockchain service network looking to release a CBDC network beta this year.

Safe, Low-Cost CBDC Payments

China’s Blockchain-based Service Network (BSN) has announced plans to launch a public beta for a global CBDC network, per a blog post.

The BSN is a blockchain network that enables digital token and decentralized app (dApp) development.

In the post, the state-sponsored network explained that it would invest a considerable amount in research and development this year. The network plans to focus on digital payments primarily as it is working towards launching a Universal Digital Payment Network (UDPN).

Speaking on digital payments, the BSN pointed out that stablecoins and CBDCs have become more prominent across the world as countries look to embrace e-payments fully. The network plans to launch a payment network based on all developed CBDCs in the next five years.

“This digital payment network will completely change the current payment and circulation method, enabling a standardized digital currency transfer method and payment procedure for any information system,” the BSN explained, adding that a convenient, cost-effective beta will be available in the second half of this year.

With the payment network, the BSN is looking to provide a standard digital currency transfer procedure. It aims to combine systems like insurance, banking, enterprise resource allocation, and mobile apps through dedicated application program interfaces (APIs) to make global payments safe and cheaper.

The payment network is one of BSN’s four objectives for the year. The other three include expanding its network, promoting its new private platform, and expanding its ecosystem. In addition, the BSN reiterated its commitment to enhancing blockchain capabilities to companies and governments worldwide.

China Forges On With Digital Yuan

So far, digital yuan has been one of China’s most ambitious economic and financial projects. Officially launched in late 2019, the project has gone through extensive tests last year and looks to be entering advanced testing phases.

Last year saw several firms and government agencies partner on testing the CBDC in several real-world situations, mainly through giveaways and retail spending. The developers haven’t relented in their efforts this year as they look to strengthen their research and testing base.

Last week, local news sources confirmed that the Agricultural Bank of China, one of the country’s largest state-owned banks, had launched ATMs for the digital yuan. As the reports explained, the machines were installed at specific branches within Shenzhen. Customers at these branches have been able to spend and convert the digital yuan tokens they got as a part of the government’s “red envelope” lottery – a project that saw the government hand out $3 million worth of the asset to 100,000 citizens.

The machines reportedly allow digital yuan deposits and withdrawals via a smartphone app. Users can also convert their savings and cash to the CBDC.

China’s BSN to Launch Global CBDC Payment System Beta in 2021

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