Blockchain is advancing across the board at a rapid pace. The most powerful states are preparing to launch their digital currencies. China has been working on its Crypto Yuan since 2014, and Russia has announced ambitious plans. But some are only discussing and developing, while others have already launched and are using them.
Valid National Cryptocurrencies
At the end of 2015, Tunisia became the first country to launch a national cryptocurrency called E-Dinar. The development was carried out together with the Swiss startup Monetas. With the help of this currency, you can pay, make transfers, as well as pay for goods and services on the Internet. The state controls the emission and distribution of E-Dinar to exclude illegal transactions.
In the UAE, the mCash cryptocurrency has already been launched and is functioning. A joint group, which is a local company, together with British experts worked on its development. This currency has the following characteristics:
- It is encrypted.
- Operates on the basis of blockchain technology.
- In the near future, it will become a legal paying method. It includes opportunities to pay for government services and the daily spending of citizens.
Senegal released eCFA in 2016. This cryptocurrency can be stored on mobile wallets. Coins are legal tender and circulate with the CFA franc. Distribution and emission are also controlled by the state.
In addition to these countries, currencies based on blockchain technology have already been issued and are used in Venezuela. It started in 2017 and is called Petro. And in Uruguay, it appeared in 2017, and it is called ePeso.
Development
Many countries all over the world are developing their own currencies. The most active ones are China, Singapore, Cambodia, Iceland, Thailand, Turkey, and Iran.
Large European and Asian states are still lagging behind. There are no cryptocurrencies in the turnover of their financial systems. But they are actively being worked on. The Reserve Bank of India is actively working on the Lakshmi Coin. Moreover, the name was chosen very thoughtfully. In India, Lakshmi is the goddess of wealth and prosperity. Although the government was initially against Bitcoin, they were very attracted to the blockchain technology.
China has been looking closely at the blockchain for a long time, and China's plans are very ambitious. They want to develop the Crypto Yuan and make it almost an analog of Bitcoin in international settlements. Some state and commercial banks have begun testing the currency and have even created educational videos for citizens.
Banks in Japan are also developing J-Coin, which will be converted to yen via a mobile app. Probably, another digital currency of state importance will function in the country. It is called MUFG, and one of the largest financial groups is engaged in its development. Although experts predict that a merger will take place.
In 2016-2017, Great Britain, Denmark, Sweden, and Estonia announced their intentions to create cryptocurrencies. But the peculiarity is that European countries are moving away from the classic blockchain technology and the idea of decentralization. Therefore, a purely state-supported cryptocurrency is unlikely to appear.
Digital Euro, Dollar, and Pound
The most popular fiat currencies like the dollar, euro, and pound, are likely to get their digital versions.
In July 2020, it became known that the British central bank plans to create a national digital currency. Moreover, the head of the Central Bank noted that this project is very important because it can have a significant impact on payment policy and society as a whole. The Bank of England is one of the participants in the association. It is studying the advantages and disadvantages of launching national cryptocurrencies. So far, it has not reached specific developers. But there is an intention to create a digital pound.
The euro has already been digitized at the moment. But so far, it is used only in test mode. So in May 2020, the first Cryptoeuro tests were carried out in France. During the test, blockchain technology was used, which was created by the French team for the formation of digital securities. Such tests are not intended to be used on an ongoing basis or for a wide range of users. This is declared in the document, which actually describes the test application of the digital euro.
America is still on the way to research the possible impact of the national cryptocurrency on the economy. The main concerns are related to the threat to financial stability. In July, a virtual hearing was held in the US Senate, which included the digital currency of the central bank. The general opinion is that without the introduction of the digital dollar, it will be difficult to maintain the international status of the currency. Therefore, they are convinced that the introduction of such a new instrument is inevitable.
Other National Digital Currencies
There are other states that have set the vector of creating a digital national currency for themselves. And some have even launched it in opposition to the existing ones.
More recently, it became known that the Central Bank of the Bahamas issued the Sand Dollar digital currency and even added it to the official annual balance sheet. At the moment, a pilot test has been carried out and 48,000 coins have been released into circulation. It is planned to attract about 2,000 users for the test launch. The main goal of launching national digital money is to modernize the region's financial system and digitize fiat money. The central bank is responsible for issuing coins, and a register of the cryptocurrency in circulation is maintained. To help the Central Bank, credit unions, banks, MTV, and other organizations are involved, which will sponsor the development of wallets for mobile payments.
In July 2020, they started talking about the development of digital tenge in Kazakhstan. One of the authorities asked to speed up the development process in order to reduce the amount of cash used. According to the authorities, they only fuel corruption schemes in the country. Among other points that can be improved by the Crypto Tenge is the transparency of the movement of budget funds in public procurement.
In April 2020, the central bank of South Korea launched a pilot program for monitoring and analyzing the work of the national cryptocurrency. According to preliminary calculations, test use will continue until the end of 2020. During this time, it is assumed that it will be possible to determine what technical and regulatory moments need to be improved in order to launch the digital currency. Already in mid-June, the Central Bank of South Korea showed the intention to develop a digital cryptocurrency. But authorized bodies declare that there is no urgent need for the release and use of a national-scale cryptocurrency.
And Thailand is another country that actively started talking about cryptocurrency in the summer of 2020. And they immediately announced the testing of the digital baht. For this, a payment system has been developed and implemented. It is oriented more towards business. The name that it received is CBDC. Expectations from the introduction of this currency into circulation are to increase the flexibility and efficiency of business payments. Also, the Central Bank is confident that CBDC will be able to increase the competitiveness of the Thai economy. Basically, the currency is now focused on wholesale purchases for financial institutions or retail for daily use.
Global Tests
2020 can be called a very active year in terms of the development of national cryptocurrencies. At the beginning of the year, 6 Central Banks created a working group with the Bank for International Settlements for a mutually beneficial exchange of data on the issue of cryptocurrency. The working group includes representatives from Canada, Switzerland, UK, Sweden, and Japan. The main goal of such a community is to evaluate the economic, functional, and technical options for issuing digital currencies by central banks. It is expected that the exchange of experience will help to decide the feasibility of developing national-scale cryptocurrencies specifically for these countries. This is the first case when Central Banks of different countries are working together on blockchain technologies.