Blockchain Revolution Series: Central Bank’s Mounting Obsession On CBDC And Blockchain Amid Pandemic Crisis

The prevailing Covid-19 apprehensions re-intensify significantly, leading to multiple waves of infections rises in case numbers; As Covid-19 started to invoke fears of a dollar liquidity crunch, gold and bitcoin like alternatives became a ripe candidates. But the need for fiat money like dollars from both domestic and outside the finance sectors arose despite the novel-coronavirus outbreak.

The sovereign governments and their central banks across the globe have been exploring the essence and the opportunities of CBDC (Central Bank Digital Currency) foreseeing a swift transformation phase in the prevailing finance system. 

In the latest development, Argentina is in the front race involving with a fragile financial system amid pandemic covid-19 crisis. Their Central Bank is embracing new technologies like blockchain for internal settlement platforms.

The First Deputy Governor of Banque de France, Denis Beau, has recently recommended deploying distributed ledger technology (DLT) for euro payment settlements within the Eurozone.

At the Second Annual Capital Markets Technology and Innovation Conference, Denis Beau advocated the European Central Bank (ECB) that the European Central Bank (ECB) should be liberal in experimenting with distributed ledger technology (DLT) as a way of settling euro-denominated transactions.

The Swiss National Bank (SNB) made an effort by signing an operational pact with the Bank of International Settlements (BIS) to delve into digital currencies in the BIS Innovation Hub Centre established in Switzerland.

While in the recent past, the central bank of the Netherlands, De Nederlandsche Bank (DNB), intends to be testing ground for the digital Euro. With that objective, the bank released a report, wherein, it divulges their readiness to “play a leading role” in the research and the development of its own and a Europe-wide digital currency. The idea of digital Euro is incepted to ease cross-border payments swifter and cost-effective for all member states.

Elsewhere, China has also been playing their role to be the frontrunner in the digital currency space and state-backed stablecoin, PBoC deputy chief recently divulged the Outlines of ‘DCEP’ (Digital Currency Electronic Payment, their native cryptocurrency). Huang Qifan, the vice chairman of the China International Economic Exchange Center, announced the name of the digital currency to be launched by the People’s Bank of China, DCEP. 

For now, the renowned Chinese bank, the Agricultural Bank of China (ABC), has started piloting for an app that will be used for the CBDC when it fully launches.

The deputy chief of PBoC, said: “The currency is not for speculation. It is different to bitcoin or stable tokens, which can be used for speculation or require the support of a basket of currencies.”

Apart from these instances, globally renowned banking-giants have also counting on their luck in this space. 

Spanish Banking Giant Santander Pilots Ethereum-Powered Bond Redemption.

Bank of America Taps R3 and TradeIX to strategize and develop the International Trade Network. And, Lloyds Bank has made an announcement of partnership with a blockchain platform, ‘Komgo’ to streamline its commercial banking division.

While Banco Santander carried out the fixed business through blockchain, the head of digital investment banking division, Mr. John Whelan, clarified the news that the bank has carried out an early redemption of its Ethereum blockchain-enabled bond that was issued in September of this year.