Digital Currency Revolution Series: A Glimpse At Global Central Banks’ Obsession of Own Digital Currencies

From the recent past, there were hush-hush talks that a top Fed official has mentioned that the US Central Bank is pondering over the idea of a digital dollar, while Democratic and Republican members of Congress communicated with the Fed Chairman Jay Powell to know the implications of such a revolutionary adoption. 

In reply, the Chairman of the Federal Reserve, Powell, said to the US representatives French Hill and Bill Fosters, who had asked whether the Federal Reserve plans to launch a digital currency. In a descriptiveletter in reply, he clarifies that they have observed the trends of digital currencies but they don’t have any plans of launching at this juncture reassuring the robustness of the demand for their currency.

But most importantly, he added in the letter: the Federal Reserve is not currently having any plans of CBDC (Central Bank Digital Currency) but will continue to analyze the potential benefits and costs of central bank digital currencies. 

At the same time, the former chairman of the CFTC (Commodity Futures Trading Commission) has advocated for the U.S. to establish and circulate a dollar-based digital token and ledger.

The timing of these considerations is not coincidental and reflects new challenges to America’s role as the lynchpin of the global financial system. 

There has been apprehensive environment of global slowdown and rumours of US debt bubble. We wouldn’t be surprised if US Fed comes up with such an idea of digital-dollar, quite a few other western nations are also conducting research and forming prototypes.

Elsewhere, European Central Bank (ECB) divulged that it intends to accelerate its plans for a central bank digital currency (CBDC) upon consumers’ discomfort in cash transactions.

In addition, the European Union (EU) appears to be constructive on blockchain adoption in their financial system. Accordingly, ECB’s (European Central Bank) idea of developing a new centralized cryptocurrency is in place. 

Benoit Coeure, who is an executive board member of the European central banker, divulged the plans of central bank’s digital currency as the real apprehension that he foresees with the current financial systems is their lack of cross-border payment action. 

At the Second Annual Capital Markets Technology and Innovation Conference, Denis Beau advocates 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.

As per AFP news agency, French central bank has announced that it would pilot a central bank digital currency in first half of 2020. 

While EU has created a blockchain and artificial intelligence (AI) fund worth EUR 400 million. It is interpreted as a movement to keep up with innovation efforts of competitor countries such as China.

While China has also lately adopted a law that will foster blockchain technology, the new law will allow the nation to launch its digital form of yuan designed to compete with the likes of Libra.

While at the China’s week for blockchain, their central bank, People’s bank of China (PBoC), launched a new certification program to regulate digital currency payments in the country.

The official report released in a filing dated Oct. 26 states that the norms and laws would be articulated and approved by the concerned authorities. The “Certification of Fintech Products” will verify and certify 11 financial technology classes including digital payments.

If France manages to come up with its own digital asset before Q1 of 2020, then it would be the pioneer among the leading countries to have such a venture, as it would come before China’s digital renminbi.