What's up with all the CBDC News?
Central bank digital currencies (CBDCs) are a hot topic in the world of finance and technology. CBDCs are digital versions of national currencies that are issued and controlled by central banks. They aim to provide a fast, secure, and convenient way of making payments and storing value in the digital age.
But CBDCs are also controversial, as they raise questions about privacy, security, sovereignty, and innovation. Some critics fear that CBDCs will give governments too much power over people's money and data, while others worry that CBDCs will stifle the development of decentralized cryptocurrencies like Bitcoin.
In this article, we will explore some of the latest news and developments related to CBDCs around the world, and how they might affect the future of money.
US Presidential Candidate Opposes Fed's CBDC Plans
One of the most vocal opponents of CBDCs in the US is Robert F. Kennedy Jr., a potential 2024 presidential candidate and an anti-vaccine activist. Kennedy recently slammed the Federal Reserve's plans to launch FedNow, a CBDC service that will enable instant and low-cost payments between banks and consumers.
Kennedy claimed that FedNow will lead to “financial slavery and political tyranny”, as it will allow the government to surveil and control people's financial affairs. He also warned that FedNow will pave the way for the government to ban and seize Bitcoin, as it did with gold in 1933.[1]
The Fed, however, has denied that FedNow is a CBDC, and said that it is merely a modernization of the existing payment system. The Fed also said that it supports innovation and competition in the payment sector, and that it does not intend to interfere with private cryptocurrencies.[2]
CBDC Transactions to Surpass $200B by 2030
Despite the challenges and criticisms, many central banks are moving forward with their CBDC projects, hoping to gain a competitive edge in the global digital economy. According to a recent analysis by BanklessTimes.com, the total value of transactions carried out with CBDCs is expected to reach over $200 billion by 2030, growing by over 1000% from 2022.[3]
The analysis also predicted that China's e-CNY will be the dominant CBDC in terms of adoption and usage, followed by India's Digital Rupee and Sweden's e-Krona. The report also highlighted some of the benefits of CBDCs, such as financial inclusion, efficiency, transparency, and resilience.
India, UAE to Explore CBDC Bridge
One of the most promising applications of CBDCs is cross-border payments, which are currently slow, costly, and complex. To address this issue, some countries are exploring the possibility of creating CBDC bridges, which are platforms that enable interoperability and exchange between different CBDCs.
One example is India and UAE, which have recently announced their intention to collaborate on a CBDC bridge project. The project aims to facilitate trade and remittances between the two countries without relying on US dollars or intermediaries.[4]
The project will leverage Ripple's XRP ledger technology, which is designed to support fast and low-cost cross-border payments using various currencies. The project will also involve other partners from Hong Kong, China, and Thailand.
European Parliament Votes to Form Final Law on EU Digital Wallet
Another initiative that aims to enhance the digital identity and access of EU citizens is the European Digital Identity framework, which was introduced in 2021. The framework proposes to create a secure and interoperable digital wallet that will allow EU citizens to access various public and private services online.
The European Parliament has recently voted to form the final law on the EU digital wallet, which is expected to be adopted by the end of 2023. The EU digital wallet will enable users to store and share their identity documents, such as passports, driving licenses, and bank accounts, as well as access services such as health care, education, and social security.[5]
The EU digital wallet will also support the use of CBDCs and other digital currencies, as well as provide a secure and convenient way of making online payments. The EU hopes that the digital wallet will boost the digital economy and innovation in the region, as well as protect the privacy and rights of its citizens.
Israel Tests CBDC for Cross-Border Payments
Israel is another country that is experimenting with CBDCs, especially for cross-border payments. The Bank of Israel has recently conducted a successful pilot test of its digital shekel, which involved sending and receiving payments between Israel and an unnamed country.
The pilot test used a blockchain platform developed by IBM, which enabled the participants to exchange digital shekels for foreign currency in real time. The test also demonstrated the efficiency and security of using CBDCs for cross-border transactions, as well as the potential for reducing costs and risks.[6]
The Bank of Israel said that the pilot test was part of its ongoing research on CBDCs, and that it will continue to explore the feasibility and benefits of issuing a digital shekel in the future.
The Bottom Line
CBDCs are one of the most exciting and disruptive developments in the world of money. They have the potential to transform the way people pay, save, and invest in the digital age. They also pose significant challenges and risks for governments, central banks, financial institutions, and consumers.
In this article, we have covered some of the latest news and developments related to CBDCs around the world, and how they might affect the future of money. We hope you enjoyed reading it and learned something new. 😊
