China’s digital yuan may be the largest central bank digital currency (CBDC), but a digital euro is coming.
European Union Commissioner for Financial Services Mairead McGuinness announced Feb. 9 plans to introduce a bill creating a digital euro next year, according to Politico.
Based on current experiments, that means an EU CBDC could launch as soon as 2025. The EU has been largely bullish on a CBDC for several years. Notably, European Central Bank (ECB) President Christine Lagarde announced on Twitter in July that the bank had “decided to move up a gear and start the investigation phase of the digital euro project.”
We have decided to move up a gear and start the investigation phase of the digital euro project. In the digital age people and firms should continue to have access to the safest form of money – central bank money. https://t.co/sGdxTiipsU
— Christine Lagarde (@Lagarde) July 14, 2021
She added, “in the digital age people and firms should continue to have access to the safest form of money — central bank money.”
In September, Lagarde said demand for a digital currency is there, and “we should respond to that demand and make sure that we have a solution that is European-based, that is secure, that is available under friendly terms, that can be used as a means of payment at reasonable terms … and does not jeopardize the whole banking system, which should be part and parcel of the proposal.”
Read more: Tackling Privacy Concerns Would Be Key to Ensuring Digital Euro Is Embraced by EU Citizens
Privacy remains a key for the EU, whose General Data Protection Regulation (GDPR) is among the strictest and most expansive data privacy laws in the world.
In the U.S., anyone expecting answer or even strong opinions from the Federal Reserve Bank’s long-awaited white paper on a U.S. digital dollar, “Money and Payments: The U.S. Dollar in the Age of Digital Transformation,” was disappointed, Darrell Duffie, a professor of management and finance at Stanford University’s Graduate School of Business, told PYMNTS this week.
See more: A CBDC in the US Will Take Years, but Some Benefits May Come Earlier
“… the United States needs to move ahead, get the technology right, and make a decision later about whether to use a central bank digital currency,” Duffie said.
But he pointed out that “Federal Reserve Chairman Jerome Powell said more than a year ago that it’s better to get it right than to be first.”
China, India and Russia Move Ahead
Meanwhile, China stepped up the public testing of its e-CNY digital yuan at the Beijing Olympics this week. While a planned formal launch was not possible, largely due to the pandemic, the CBDC has been widely used as Olympic sponsorships forced a blackout of the two payments apps that have more than 90% of the market, AliPay and WeChat Pay.
Another major power aggressively pursuing a CBDC, Russia this week allayed fears that it planned to ban private cryptocurrencies. In a Feb. 8 announcement the government and Bank of Russia agreed on the regulation of cryptocurrencies, just weeks after the central bank called for an outright ban.
See more: Russian Central Bank Might Ban Crypto Investments
Last week, another CBDC-eager nation, India, allayed concern that it would ban cryptocurrencies outright, although using them as a means of payment remains off the table.
Read more: Crypto Coming to India with Digital Rupee, 30% Tax
Kenya is asking for public to comment on a CBDC, moving gingerly ahead. While it was an early experimenter with digital currencies — Safaricom’s M-Pesa in 2007 — the central bank still worries about various risks, according to Kenya’s WTVB.
See also: Kenya Releases CBDC Discussion Paper While Seeking Public Input
These include commercial banks losing deposits that fuel lending, financial exclusion of those lacking access to technology, and its impact on the bank’s ability to fight money laundering, the bank said.
Zimbabwe’s central bank is exploring a CBDC while remaining steadfast in its opposition to private cryptocurrencies, according to bitcoin.com.
So is Jordan’s central bank, Coingeek said.
Read also: Jordan Central Bank Considering CBDC
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