For Central Bank Digital Coins (CBDCs), demos, demos are ubiquitous – and some actual launches too.
Not surprisingly, central banks are increasingly following the progress made by China in introducing the digital yuan for the first time and moving towards launching their own digital currency. We’re seeing a flurry of activity in the first few weeks of the new year from the private sector as well.
Here is a summary of some of the recent developments:
Switzerland: On Thursday (January 13), it was reported that the Swiss Central Bank had successfully tested a digital currency used for wholesale transactions. The Swiss National Bank, as reported by Reuters, said it worked in conjunction with the Bank for International Settlements (BIS), SIX, the Swiss Stock Exchange and several banks including UBS, Credit Suisse, Goldman Sachs, Citi and others.
The project is known as Helvetia, and in terms of mechanisms, the digital currency was used to simulate transactions between financial institutions, in which transactions were settled instantly, eliminating counterparty risks.
China: In further indications of China’s cryptocurrency progress, as noted in this space, Tencent Holdings’ WeChat, one of the country’s largest messaging apps, said it will begin accepting digital yuan payments through WeChat Pay, its digital wallet. Up to 1.4 billion people use WeChat and Alipay digital wallets to send and receive mobile payments. The central bank has already released its digital yuan wallet in Google and Apple app stores within China.
Read also: Chinese payments giant WeChat to accept digital yuan
Mexico: A few days into the new year, the Bank of Mexico stated that it wants to trade its own digital currency sometime in the next two years, in a bid to boost financial inclusion.
Mexico’s central bank president, Andres Manuel Lopez Obrador, said on Twitter that it was important to “use these new technologies and the latest generation of payments infrastructure as valuable options to enhance financial inclusion in the country.” Cash is the mainstay of the informal economy, which makes up nearly a fifth of the country’s gross domestic product.
Read more: Bank of Mexico targets 2024 CBDC launch
United State , We note, that it has been seen as something of a perpetual underdevelopment in the CBDC space. The long-awaited report from the US Federal Reserve on the viability of central bank digital currencies (and what it takes to get there) may be on the horizon. Federal Reserve Chairman Jerome Powell said the report will come down sometime “in the coming weeks.” It comes about a year after Powell said the digital dollar remains a “top priority”.
See also: A year later, Fed Chairman Promises Cryptocurrency, CBDC Report ‘Coming Soon’
India, for its part, has also been in the news this week regarding digital central bank currencies. The country’s central bank said it will set up a fintech division that will partially develop regulations for the issuance of its upcoming central bank digital currency (CBDC).
the private sector too
Private companies are stepping up their efforts to create and experiment with digital currencies at the dawn of the new year.
In addition to the aforementioned banks that have worked with the Swiss Central Bank, as reported on Thursday (January 13), Visa said it is working with blockchain software company ConsenSys to launch a central bank digital currency pilot program to test retail applications such as cards and wallets. . Thus Visa followed the 2020 Mastercard of the CBDC testing platform that enabled banks to simulate the issuance, distribution and exchange of central bank currencies between banks and financial service providers.
Read also: Visa teams are working with ConsenSys to pilot a central bank digital currency