Technically, the Central African Republic’s (CAR’s) decision to make bitcoin a legal tender alongside the regional CFA Franc isn’t central bank digital currency (CBDC) news. In some ways, it’s the opposite, as many CBDC projects are aimed at preventing the use of cryptocurrencies, and particularly stablecoins, as a means of payment.
However, it’s still worth mentioning, in part because a crypto national digital currency is close enough. But also because there is more than a little suspicion that the desperately poor, war-torn central African nation’s move will undermine the currency it shares with five neighbors in favor of what is widely seen as a corruption-friendly means of payment.
After all, in a country in which two-thirds of the populace does not even have a mobile phone, to say nothing of internet access, it’s not exactly an obvious choice. And given the International Monetary Fund’s (IMF’s) hostility to El Salvador’s bitcoin adoption is holding up a debt-refinancing loan in that country, angering the lender whose help the CAR desperately needs is even less of an obvious choice.
Then there’s the matter of the plan to make the CAR one “of the world’s boldest and most visionary countries,” according to the president’s chief of staff, which wasn’t known to be under consideration until a week ago, especially since crypto was only legally recognized a day earlier.
Russia and India have both announced 2023 CBDC launch dates, with the Central Bank of Russia’s strongly anti-crypto president, Elvira Nabiullina, saying the digital ruble is a “priority project” and that a pilot focusing on international settlements will launch next year, Reuters reported. Not that the heavily sanctioned nation has all that many international settlements at the moment.
As for India, the digital rupee that has been strongly embraced by Prime Minister Narendra Modi’s government as it banned the use of cryptocurrency as a means of payment — and nearly banned it outright — is looking at a 2023 launch, according to The Times of India.
“The government and the RBI are looking into its several commercial use purposes and not just financial inclusion,” which it has a grip on through other means, Finance Minister Nirmala Sitharaman said, per the report.
Mexico is shooting for a 2025 launch of a digital peso, Bank of Mexico Governor Victoria Rodríguez Ceja said, according to Ledger Insights. While its primary goal will be increasing financial inclusion, faster payments and interoperability are also key.
That’s a year behind the 2024 goal the central bank announced in January.
See more: Bank of Mexico Aims for 2024 CBDC Launch
The Philippines will pilot a wholesale CBDC “as part of its efforts to promote the stability of the country’s payment system,” the central bank announced in a press release this week. The pilot will cover the use “of CBDCs for large-value financial transactions on a 24/7 basis across a limited number of financial institutions,” Bangko Sentral ng Pilipinas (BSP) announced.
“‘Project CBDCPh’ marks a major step not only for the Philippine central bank but also for the entire finance industry to better understand the opportunities and risks of wholesale CBDCs,” BSP Governor Benjamin Diokno said in the release.
Not so Sure
Hong Kong is sounding more ambivalent about its own CBDC project, with the Hong Kong Monetary Authority having trouble coming up with an actual reason for a CBDC besides being innovative, according to a recent paper, although it did say stablecoins were considered a threat as it invited public input, Cointelegraph reported.
Meanwhile, the Royal Bank of New Zealand (RBNZ) said it would come to a conclusion about “future directions” of a CBDC project in six months, after releasing the results of a public consultation period, Interest.co.nz reported.
“A considerable portion of the feedback reflected a general distrust of public authority and the consultation process, rather than CBDC itself,” the RBNZ said, per the report.
Unfounded concerns that a CBDC would replace cash and the need for strong privacy protections were among other issues that came up in the responses, the report stated.
The bank of Japan recently said that it will not decide on a digital yen until 2026.