Central banks around the world want to get into digital currencies

[Swopon]

Intense interest in cryptocurrencies and the Covid-19 pandemic have sparked debate among central banks on whether they should issue digital currencies of their own.

China has been in the lead in developing its own digital currency. It’s been working on the initiative since 2014. Chinese central bank officials have already conducted massive trials in major cities including Shenzhen, Chengdu and Hangzhou.

“China’s experiment is very large scale,” said J. Christopher Giancarlo, former chairman of the U.S. Commodity Futures Trading Commission. “When the world arrives in Beijing next winter for the Winter Olympics, they are going to be using the new digital renminbi to shop and to stay in hotels and to buy meals in restaurants. The world is going to see a functioning [central bank digital currency] very soon, within the coming year.”

The U.S. is playing catch-up. In late February 2021, Fed Chairman Jerome Powell said the U.S. will engage with the public on the digital dollar this year.

Advocates contend central bank digital currencies can make cross-border transactions easier, promote financial inclusion and provide payment system stability. There are also privacy and surveillance risks with government-issued digital currencies. And in times of economic uncertainty, people may be more likely to pull their funds from commercial banks, accelerating a bank run.

The source of that article can be found here: https://www.cnbc.com/2021/03/06/why-central-banks-want-digital-currencies.html

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[Renampun]

There is a difference between digital currency and cryptocurrency...
but we are on the way to mass adoption of both. Several countries are already planning to circulate their own cryptocurrencies and it is true that China is currently the lead in developing its own digital currencies and cryptocurrencies.

[FlightyPouch]

More like these countries wanted to push their digital currencies since crypto currencies like bitcoin are getting the limelight they needed. While people are still fine using online wallets like Paypal as a payment method, I don't think they have that kind of idea to ride with the government pushing their digital currencies. I mean they can just use these online wallets with no problem.

This will take some time and for sure, there will be a lot of debate between government officials about this. They said that the current government is not against crypto currencies but what about these digital currencies?

[NeuroticFish]

All they want is to issue their own version of stable coins.
This would allow them the ultimate control over money, from KYC and following all the transactions to seizing the funds they want at will.
This is completely centralized and very far from Bitcoin's paradigm.

All in all, don't be too happy about those news...

[7788bitcoin]

Intense interest in cryptocurrencies and the Covid-19 pandemic have sparked debate among central banks on whether they should issue digital currencies of their own.

The interest in cryptocurrencies by the central banks is because of the insane valuations these markets are gaining and it has nothing to do with the pandemic. We are hearing for a long time that we will see government minted digital currencies and we knew they will come up with their version of blockchain based currencies and expect that in the next 5 years.

[Sterbens]

economy that is currently unclear, has given up on the growth of crypto, they have finally plunged into the digital transaction system. This is how it should be, because if countries stand firm and reject cryptocurrency, they will struggle with monotonous economic growth. China long ago predicts its future economy, We have heard of this, and every country is planning well. we will see how they will convert fiat money into crypto.

[mirakal]

If they think they can compete with bitcoin, then they are wrong.

Central bank can make a digital currency and let people adopt with it with the help of the government, however, they can't compare to bitcoin in terms of transparency as central bank from its name is "centralized", it cannot compete to a "decentralized" asset or currency which is bitcoin.

[dimonstration]

Banks should have knowledge on how to use and how the crypto works and to be able to do that there is a need for bank adoption for crypto or simply a way for them to acknowledge that crypto is much useful nowadays and many prefers to use it in having transaction. There are plenty of questions whenever you will do cashout in banks about the money you have from crypto trading which sometimes irritating when they do checking too much since they don’t know how crypto trading works.

[Gozie51]

If they think they can compete with bitcoin, then they are wrong.

Central bank can make a digital currency and let people adopt with it with the help of the government, however, they can't compare to bitcoin in terms of transparency as central bank from its name is "centralized", it cannot compete to a "decentralized" asset or currency which is bitcoin.

Such kind of coin will definitely be centralized and will have the same issues that centralized coins have like manipulation etc just like ripple and centralized coins. Despite that the government is going to make it mandatory for use but I'm believing the force won't stop the use of bitcoin because bitcoin is freedom and can't be manipulated.

[Hydrogen]

I doubt any aside from the most hardcore supporters of china will be thrilled by its design choices.

While bitcoin is a deflationary currency designed to increase in value over time, eCNY is an inflationary currency designed to decrease in value over time.

In fact, in its current incarnation, it expires worthless if it isn't spent within a few weeks.

https://news.yahoo.com/central-bank-digital-currencies-mean-170227215.html

China's central bank issued digital currency

• Is designed to decrease in value over time. It is claimed this will encourage end users to spend and use it.
• Expires & becomes worthless if it is not spend within a few weeks

Around 7 years ago there were rumors of china increasing its gold reserves in preparation to back its native yuan currency in gold.

A solid and proven method to encourage adoption of the yuan as an international reserve currency. Increasing china's power and influence.

I can't see how anyone would want to utilize a digital currency under the oppressive and restrictive terms chinese central banks are creating.

[DarkIT]

I doubt any aside from the most hardcore supporters of china will be thrilled by its design choices.

While bitcoin is a deflationary currency designed to increase in value over time, eCNY is an inflationary currency designed to decrease in value over time.

In fact, in its current incarnation, it expires worthless if it isn't spent within a few weeks.

https://news.yahoo.com/central-bank-digital-currencies-mean-170227215.html

China's central bank issued digital currency

• Is designed to decrease in value over time. It is claimed this will encourage end users to spend and use it.
• Expires & becomes worthless if it is not spend within a few weeks

Around 7 years ago there were rumors of china increasing its gold reserves in preparation to back its native yuan currency in gold.

A solid and proven method to encourage adoption of the yuan as an international reserve currency. Increasing china's power and influence.

I can't see how anyone would want to utilize a digital currency under the oppressive and restrictive terms chinese central banks are creating.

It's true, their is more rumor toward the action of china economic action. Till now, the propaganda was not proved.But their is myth regarding this one. After the cold war, the country begins to increase their assets. It's just to became a economic stroger equal to the United Status. The reason for acceptance of United States words is, they are developed country.And they can help financial for other country.

[BrewMaster]

the fear has been among banks for a couple of years now, this is not news. they have been thinking and planning on how they can deal with the out-of-control growth of bitcoin that has taken the world by surprise. their first reaction was just like what you'd expect from the old timers, they tried to copy bitcoin. they even got involved with centralized shitcoins and tried working through them. all of their plans have been failing so far. that is why some of them PayPal, Visa, JPMorgan,... have been changing strategies and have been trying to adopt bitcoin. so far PayPal has given up and adopted bitcoin for good. we have to see who's next.

[dkbit98]

Central banks will probably follow something similar like Binance exchange is doing, they will create their own centralized chains and centralized currencies.
Then they will be able to rollback, change, freeze anything they want or ban anyone who they don't like, but they will say that fees are cheaper than for Bitcoin
China is doing the same thing with their digital coin now and they even have special hardware wallets for that, other countries will follow later.
People should finally wake up before it's too late and understand the power of Bitcoin.

[Vaskiy]

There is a difference between digital currency and cryptocurrency...
but we are on the way to mass adoption of both. Several countries are already planning to circulate their own cryptocurrencies and it is true that China is currently the lead in developing its own digital currencies and cryptocurrencies.

Well said, most of the countries in the name of digital growth have encouraged the usage of digital currencies. This means very small percentage of people were aware of the credit/debit Card usage and now through continuous promotion its usage has increased alot. Apart from this development more number of government banking services have begun to make use of the blockchain technology and very few around the world are supporting cryptocurrency development and usage.

[AndySt]

Central banks will probably follow something similar like Binance exchange is doing, they will create their own centralized chains and centralized currencies.
Then they will be able to rollback, change, freeze anything they want or ban anyone who they don't like, but they will say that fees are cheaper than for Bitcoin
China is doing the same thing with their digital coin now and they even have special hardware wallets for that, other countries will follow later.
People should finally wake up before it's to late and understand the power of Bitcoin.

The people of the world can wake up as much as they want, but nothing will change the fact that state currencies based on the blockchain are the reality of our near future and are one of the elements of the fiat money system. Just do not go to extremes and think that this will replace the entire monetary system. Undoubtedly, there will be some costs in the implementation process, but let's hope that the state authorities and ordinary citizens will eventually find acceptable options for the system, which will take into account both the state interests and the rights of citizens.

[cabron]

There is a difference between digital currency and cryptocurrency...
but we are on the way to mass adoption of both. Several countries are already planning to circulate their own cryptocurrencies and it is true that China is currently the lead in developing its own digital currencies and cryptocurrencies.

Well said, most of the countries in the name of digital growth have encouraged the usage of digital currencies. This means very small percentage of people were aware of the credit/debit Card usage and now through continuous promotion its usage has increased alot. Apart from this development more number of government banking services have begun to make use of the blockchain technology and very few around the world are supporting cryptocurrency development and usage.

The pandemic had made the government push the digital currencies harder to the people, they were even burning banknotes. Once the adoption of digital currencies is just as easy as installing an app on the phone, users will also have access to cryptocurrencies and then this is going to be useful for its adoption. Its not easy for undeveloped countries to release digital currencies though.

[Twinkledoe]

Central banks will probably follow something similar like Binance exchange is doing, they will create their own centralized chains and centralized currencies.
Then they will be able to rollback, change, freeze anything they want or ban anyone who they don't like, but they will say that fees are cheaper than for Bitcoin
China is doing the same thing with their digital coin now and they even have special hardware wallets for that, other countries will follow later.
People should finally wake up before it's to late and understand the power of Bitcoin.

The people of the world can wake up as much as they want, but nothing will change the fact that state currencies based on the blockchain are the reality of our near future and are one of the elements of the fiat money system. Just do not go to extremes and think that this will replace the entire monetary system. Undoubtedly, there will be some costs in the implementation process, but let's hope that the state authorities and ordinary citizens will eventually find acceptable options for the system, which will take into account both the state interests and the rights of citizens.

We are already heading in that direction. That's why, there's no doubt banking institutions are already in this game. I am sure, a lot of them are already dedicating specific division to develop their own digital cryptocurrencies. A matter of time before they fully introduced it to their clients. In the next few years, we will know what they are cooking in terms of digital currencies.

[Darker45]

It's just the old fiat currency taking into a new form. You know, the world changes along with the rising of new technological innovations. The old way of doing fiat transaction is so obsolete that it has to evolve and adapt to the times. The internet has gone mainstream, payment systems are shifting online, globalization makes buying and selling of goods and services intercontinental, and so on and so forth. The world has gone digital and fiat is a little bit left behind. Bills and metal coins are things of the past.

But all this does not mean fiat has essentially improved.

[bussybuddy]

I also think that CBDC will be an indispensable part of this market, I learned about these concepts quite early when the market was in 2017. And the project that I was interested in was Cyphereum. But after a long time, CPH is only trading as IOU, and all the data that you are mentioning I think belongs to that project.

[Strongkored]

What Central Bank is doing is digitizing Fiat, not creating cryptocurrency. This means that they still have full control over the circulation of the country's digital currency, so this is centralized.
This is also what is being implemented in my country to digitize the local currency because currently transactions are done digitally and online, the government felt the need to do this.