Which countries think a state-issued digital currency is a good idea?
A central bank-issued digital currency (CBDC) is becoming a topic for discussion around the world. In July, Germany said it was “too risky”, but other countries have a less pessimistic view of the concept of a “central bank issuing digital fiat money”, which is somewhat different to a cryptocurrency in the form as we know it. Some countries have already implemented the idea, while others are still researching it.
Countries adopting CBDC
OK, so Tunisia, Senegal, Venezuela and the Marshall Islands are adopters. Senegal has issued blockchain-based eCFA. The eCFA is fully dependent on the central banking system and can only be issued by an authorized financial institution and was created as a result of the collaboration between local bank Banque Régionale de Marchés (BRM) and eCurrency Mint Limited, an Ireland-based startup that assists central banks in creating their own digital fiat currencies.
Tunisia has the eDinar/Monetas and The Marshall Islands, which uses the U.S. dollar, has iintroduced ‘Sovereign’ (SOV) as its digital form of legal tender. Venezuela has the Petro, a digital currency designed to end the U.S. financial blockade of Venezuela.
Ecuador decided to issue a CBDC in the hopes of stimulating economic growth. However, the currency failed and it was withdrawn in March 2018. The reason for this was not enough users, “essentially because people were reluctant to accept another currency — being used to U.S. dollars — and didn’t trust the BCE as an institution.”
Estonia, poster child for the blockchain revolution, issued the Estcoin, but EU regulators clamped down on it, saying, “No member state can introduce its own currency; the currency of the eurozone is the euro.” However, the Estcoin remains in use as an “incentive” within the e-residency community.
Switzerland, Hong Kong and Japan have already decided against it.
However, there are some countries experimenting with the idea, including: Uruguay, Iran, Dubai, UAE and Singapore. In the case of Iran, a digital currency may offer a way around U.S. sanctions. And there are those who are still looking into it, namely: Israel, UK, Sweden, Norway, Canada, China and Thailand.