According to the latest report by the Bank of International Settlements, the international body doubled-down on its narrative that the ongoing pandemic has exemplified the need for central banks to accelerate the development of central bank digital currencies (CBDCs).BIS further highlighted the ongoing payment digitization phase and claimed that whoever launches such currency first will ultimately prevail. Currently, several central banks around the world are working on their centralized digital currencies, and some are close to issuing to the general public.
“The financial sector is currently in a significant transitioning stage.”
The BIS report noted that the financial sector is currently in a significant transitioning stage where central banks and fintech companies are developing and implementing new digital payment options to facilitate user experience and to lower the transaction costs. Such examples coming from banks are centralized digital currencies. The report states that one option at the frontier of policy opportunities is the issuance of CBDCs, which could amount to a sea change. CBDCs could offer a new, safe, trusted, and widely accessible digital means of payment, according to the Bank for International Selttelemts.
China is expected to issue digital yuan soon.
The People’s Bank of China has been working on its centralized digital currency from the last 5 to 6 years. The central bank of China is now all set to issue the digital version of yuan dubbed as DCEP (Digital Currency Electronic Payment). The PBoC is currently testing its central bank-backed digital currency in four cities. China is all set to become the first major nation to its centralized digital currency. However, China is not the only country that is actively developing its digital currency. Central banks around the world are researching and running pilot projects to get in the race to launch their CBDC. As reported earlier, Canada’s central bank had posted a job opening for the CBDC project manager.