Central governments around the world are currently considering the need for a central bank digital currency (CBDC). All thanks to China, which was the first country to research and accelerate the realization of a central bank digital currency.

Uneasy about the progress of China's digital currency, Japanese lawmakers have also begun discussing the possibility of issuing a central bank digital currency. China has been exploring the benefits of a central bank digital currency since 2014, while the Bank of Japan (BOJ) also began actively exploring a central bank digital currency in November 2018.

In fact, other countries such as Canada, Switzerland and Sweden have also joined the race to develop central bank digital currencies. Central bank members from the three countries are also scheduled to meet in April 2020 to discuss the possibility of establishing their respective central bank digital currencies.

Sweden started testing its digital currency project e-krona on February 20, 2020. Likewise, Federal Reserve (FED) Chairman Jerome Powell also confirmed that the central bank is exploring the benefits of a central bank digital currency. In addition, European Central Bank (ECB) President Christine Lagarde has recently spoken about central bank digital currencies, saying that the ECB is eager to see the use of central bank digital currencies.

However, it is not only government agencies around the world that are conducting research on central bank digital currencies. Many cryptocurrency experts are also paying close attention to central bank digital currencies. Vitalik Buterin, the founder of Ethereum, gave his latest opinion on it.

In a recent Block TV podcast, Vitalik spoke about his thoughts on where digital currencies are headed globally, claiming that digitalization is inevitable.

He added:

With or without blockchain, digitization is inevitable. The main challenge facing central bank and corporate-issued currencies is the centralization of power, the centralization of data collection, and you need to rely on a potential centralized intermediary to control these systems, and they have the right to decide on the users involved.

Vitalik predicts that the more attractive currency in the future will be decentralized and private, as it will be better able to avoid the "bottleneck of centralization." He added:

We've seen a lot of that where even perfectly legal stuff ends up being restricted because whoever runs a centralized node (checkpoint) just wants to exclude certain categories of users, which I think is This is why people will continue to be interested in fully decentralized digital currencies.

On the other hand, a recent report on central bank digital currency released by the Bank for International Settlements (BIS) shows that the current digital currency projects underway in various countries around the world do not clearly focus on the field of cross-border payments.

The report also states:

As far as cross-border connectivity is concerned, no central bank digital currency project has explicitly focused on payments outside the jurisdiction of the central bank. It is worth noting that several central banks are currently carrying out cross-border payment pilot projects, and they also focus on consumer experience while developing central bank digital currency.

Back in January 2019, the Bank for International Settlements released a report saying that 70% of central banks were exploring how to build mutual confidence among themselves. Although countries have long been gearing up for central bank digital currencies, no central bank has really set a specific release date. With the accelerated pace of digitization in the past few months, the question of central bank digital currency is no longer "will it be issued", but "when will it be issued".

Responsible editor; zl

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