Our current monetary system is comprised of state-backed fiat currency. While the actual money-changing-hands approach has seen a steady decrease, hence we might be moving towards a cashless society, and digitally transferring funds is considered favorable payment solution, countries like Sweden and Canada are researching the issuance of digital decentralized currency. Nationwide trade restrictions, issued by one of the world’s most powerful countries, the US, are also a reason for issuing a digital decentralized currency, or the more commonly referred to Central Bank Digital Currency (CBDC). In a about CBDC, Christine Lagarde, Managing Director of the IMF stated: speech ‘The case is based on new and evolving requirements for money, as well as essential public policy objectives. My message is that while the case for digital currency is not universal, we should investigate it further, seriously, carefully, and creatively.’ That is exactly what a lot of countries have taken to heart. According to a recent from the Bank of International Settlements (BIS), 70% of central banks (based on 63 central banks that participated in the survey) are currently researching the issuance of a CBDC. The majority of the countries currently investigating to launch of a digital currency, cited ‘financial inclusion’ as the main reason for exploring CBDCs. report Creating a new cryptocurrency, in oppose to accepting Bitcoin as an official form of payment seems favorable to most countries. In many countries, Bitcoin is allowed to be transferred as a form of payment, however, there is no country as of yet, where Bitcoin is officially considered legal tender. The topic of CBDCs and their many forms and approaches, benefits and drawbacks seems like an interesting angle for a more in-depth article, that I will probably follow up on, at a later time. Countries to issue a state-backed digital currency The Republic of the Marshall Islands In 2018, The Marshall Islands the creation of a new official digital currency, called the Sovereign (SOV), after issuing the of 2018. The SOV will become the Republic’s legal tender, just like the US Dollar. The Marshall Islands are situated near the equator in the Pacific Ocean and have a population of nearly 60,000. The Sovereign will be created with the help of Israeli startup, . The country aims to raise $30 million from the SOV crowdsale, of which, $15 million will go towards Neema for the development of the digital currency. The country initiated the SOV to raise cash for paying the bills and give a boost to the economy. announced Sovereign Cryptocurrency Act Neema Blockchain smart-wallet provider, , announced a partnership with SOV in which they agreed to produce physical blockchain bank notes for the Marshall Islands official legal digital tender. Tangem Singapore In 2017, project Ubin, a digital version of the Singapore Dollar (SGD) was announced. The Central Bank issued digital currency, would be running on the Ethereum blockchain. Project Ubin is a collaboration between the central bank of Singapore and , a blockchain for business organization. R3 In 2018 the Managing Director of the Monetary Authority Singapore, publicly criticized the idea of a CBDC. After his statement on the topic, no further information about the SGD has been made public. Iran Following the US trade restrictions, Iran it will issue its own cryptocurrency, that will be pegged to the official national fiat currency, the Rial. The Central Bank of Iran (CBI) recently new rules regarding cryptocurrencies, reversing a previous ban. There are however still trading restrictions on the use of digital currencies in the country. announced drafted Venezuela The Petro (PTR) was introduced in December of 2017, as a supplement to the Venezuelan Bolivar (VEF) and to overcome the US sanctions. According to the government, the Petro is backed by oil, gas, gold and diamonds. A lot of controversy surrounds the Petro Dollar; read more about it in article. this Senegal The eCFA, a digital version of the national fiat currency, the CFA Franc, was back in December 2016. The eCFA was created by local bank outlet, Banque Régionale de Marchés (BRM) and eCurrency Mint Limited, which is an Ireland-based startup that assists central banks in creating their own digital fiat currencies. issued The second phase of the eCFA issuance is the roll-out of the digital currency in other African countries including Niger, Togo, Benin, Burkina Faso and others. During my research, I could not find additional, up-to-date information about the introduction of eCFA in these other African countries. Tunisia Tunisia was the first country in the world to issue an official state-backed digital currency, in 2015, called the e-Dinar. UAE and Saudi-Arabia On the 29th of January, this year, the United Arab Emirates Central Bank (UAECB) and the Saudi Arabian Monetary Authority (SAMA) the collaboration in launching the digital currency project ‘Aber’. Aber will be used in financial settlements between the two countries. announced One of the United Arab Emirates, Dubai, announced its own cryptocurrency in October 2017. Emcredit, a subsidiary of Dubai Economy and Object Tech Group ltd, from the UK, will work together on creating emCash, Dubai’s very own CBDC. enCash will become an official payment solution for government and non-government services in Dubai. Peru The South-American country issued , a state-backed cryptocurrency based on the Ethereum blockchain. PeruCoin was introduced to promote the trading of digital currencies and to increase to the adoption of cryptocurrencies among the population. Even though it appears to be state-backed the project is managed by a company called Bits2u. The website appears to have some red flags relating to the project, comparing it with the SECs ‘ICO warning website’ . The ICO also does not seem to attract a lot of interest. PeruCoin Howey Coins Countries researching digital currencies Canada The bank of Canada has been doing on the issuance of a CBDC, since 2016. In the most recent paper, by S. Mohammad R. Davoodalhosseini, from the Funds Management and Banking Department of the Bank of Canada, the welfare gains of introducing a CBDC are estimated to lead up to a 0.64% increase in consumption for Canada. No actual plans for issuing a CBDC, in Canada, have been announced so far. research Thailand The Central bank of Thailand has been working on a CBDC for a few years now. Q1 of 2019 is projected to of the plans to issue a CBDC. A proof-of-concept trial should be ready by March of this year. launch the first phase Israel As the cryptocurrency industry continues to grow in Israel, the Bank of Israel is . A representative of the Ministry of Finance stated, a state-sponsored cryptocurrency aims to lower the nationwide cash-transactions, while at the same time cracking down on tax evasion and money laundering. A draft legal-framework has been issued at the beginning of 2018, follow-up news is difficult to find, online. considering issuing a state-sponsored cryptocurrency China The war most likely has China working overtime on issuing its own Public Bank of China (PBoC) backed cryptocurrency. The first reports surfaced in 2016, stating China is creating its own blockchain-based digital currency. China has already 78 digital currency patents, of which 44 are blockchain related, since 2016. Sino-US trade registered The Bahamas Here we have another Pacific island exploring cryptocurrencies. The Central Bank of the The Bahamas has launching a pilot cryptocurrency for the archipelago. announced Deputy Prime Minister and Minister of Finance, K. Peter Turnquest stated, during the Bahamas Blockchain and Cryptocurrency Conference_, “The production of a modern fully digital payment service is the way forward for this era of governance. A digital Bahamian currency is especially important for the many family islands as they have seen many commercial banks downsize and pull out of their communities, leaving them without banking services.”_ Uruguay The South-American country of Uruguay started , in 2017, in testing a digital version of the Uruguayan Peso. The Central Bank of Uruguay (CBU) wanted to test and see if a digital payment option is a viable way of doing business in the future. The pilot was carried out with 10,000 testers that downloaded a smartphone app from national telecommunications provider ANTEL. No updated after-trial information could be found online. a six-month long trial The Netherlands The Dutch Central Bank (DNB) has also experienced the idea of issuing a digital currency. In the , the research of issuing a CBDC is mentioned a few times. DNB acknowledges the potential benefits but also sees bottlenecks. DNB Payments Strategy Overview for 2018–2021 Norway Norges Bank, the country’s central bank, started a working group to examine the implications of issuing a CBDC. , 55-page long paper, written by Norges Bank associates, addresses possible approaches, benefits and drawbacks from issuing a CBDC. This Sweden Sweden’s Riksbank is issuing the e-Krona a state-backed digital currency. The Riksbank is researching the effects that a cashless society might have on the country and they are looking for solutions for the increasing digitalization. The most report proposes the research into the legalities of Riksbank issuing a CBDC. The report also asks for development and a technical proposal for a viable e-Krona. considering recent Eurasia Russia’s Ministry of Finance believes that issuing a Eurasian Economic Union-backed digital currency is inevitable, given the , of August 2018. The Eurasian Union was created in 2014 and is comprised of five member countries, Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan. new US imposed sanctions Countries with a preliminary rejection of issuing a digital decentralized currency Germany After conducting thorough research, the German Federal Ministry of Finance stated, on the 5th of July 2018, a CBDC would be too risky to issue at the moment, thereby rejecting the interest in pursuing a central bank backed cryptocurrency. Switzerland , chairman of SIX traditional stock exchange in Switzerland, proposed the idea of an e-Franc, in February of 2018, stating, ‘ .’ Romeo Lacher An e-franc under the control of the central bank would create a lot of synergies — so it would be good for the economy The Swiss National Bank responded, with a statement of Vice President Fritz Zurbrügg, ‘Would broad access to a CBDC or broader access to digital central bank money have better results than the current monetary system? And would the Swiss National Bank thereby better fulfill its legal mandate? From our perspective, it’s a no to both questions,’ The United Kingdom The Bank of England (BoE) it will put a temporary hold on researching the issuance of a CBDC, because of the current economic stability issues, regarding the Brexit. announced Hong Kong While Mainland China is in the process of launching its own cryptocurrency, Hong Kong is the opposite. They are not currently looking to issue a CBDC as they feel it has no superiority over the current monetary system. stating South-Korea South-Korea’s central bank, the Bank of Korea (BOK) , in June of 2018, they are opposed to issuing a CBDC, citing high costs for the society and the moral hazard. According to the BOK, issuing a CBDC will raise the basic mechanics of monetary policy and implementation. announced Japan Japan dismissed the idea of a central bank digital currency when the Bank of Japan’s (BOJ) Deputy Governor spoke negatively about the effect CBDCs might have on the financial system. On the 22nd of October 2018, Deputy Governor, Masayoshi Amamiya, , ‘There are many aspects we need to look into, whether it would actually contribute to improving the efficacy of financial policies or financial stability.’ stated Failed attempts at issuing a CBDC Ecuador The state-backed cryptocurrency Dinero Electronico (DE) was back in 2014 and launched in December of that same year, with a small group of accredited users. The system was designed to support the country’s Dollar-based system, not compete with it. The DE was pegged to the US Dollar 1:1. In December 2017, the Ecuadorian government decided to , because of a lack of traction. announced discontinue the program Concluding remarks As I see it, the digitalization of our society is continuing at a rapid pace. With the availability of widely accepted smartphone payment apps, the support of governments for a digital form of currency should not be a very far stretch. The issuance of state-backed digital currency can become the next milestone in the evolution of money. Only time will tell how CBDCs influence our monetary system. I will be following the developments closely… Disclaimer : This article is not intended as investment advice. You should always do your own research. All the information provided in this article is based on my own personal opinion. During these challenging market conditions, I strongly urge everyone to thoroughly research projects to potentially invest in. If you do decide you want to invest, only invest money you can afford to lose. If you like my content about blockchain and cryptocurrencies, you can give me a follow. I also have an account on and . You are welcome to follow me there as well. On my page, you will find a bit more personal information. You can ask me questions on Telegram: @LindaCrypto. Steemit Twitter LinkedIn I hope you have enjoyed this article, and please comment in the allocated section below if you have any further questions. Thank you! Linda Willemse
