Over the past few days, some of the world’s most powerful people — the 1% of the 1%, so to speak — have convened in Davos, Switzerland to talk just about everything at events, namely the World Economic Forum of 2020.
Years ago, a mention of words “Bitcoin” and “cryptocurrency” would likely elicit laughter, but this year, cryptocurrencies, or at least “digital assets,” were a leading topic.
More specifically, there was a buzz at the Davos event about the advent of central bank digital currencies (CBDC), some of which will soon be launching, and could have a massive impact on how the world’s finances work.
Digital Currency Becomes a Hot Topic at Davos
Ever since Facebook and its partners launched the Libra initiative in June of last year, there has been an ever-growing buzz around digital currencies; one of the world’s most powerful companies in Facebook launching a cryptocurrency had central banks realize they had to do something to stop a corporation from asserting control over the financial system.
The World Economic Forum just released a framework for CBDC dubbed the “CBDC Policy‑Maker Toolkit.” The 28-page guide is aimed at giving central banks a form of assessment of whether or not they need to develop a digital currency to benefit their economy. =
In a similar manner, the Bank of International Settlements (BIS), most often called the “central bank for central banks,” issued an extensive report on the latest developments in the fledgling CBDC space on Thursday.
The report indicated that 40% of the 66 central bank respondents have “progressed from conceptual research to experiments, or proofs-of-concept; and another 10% have developed pilot projects… Every central bank that has progressed to development or a pilot project is an EME institution.”
This survey came two days after a press release by the Bank of England revealed that the central banks of Canada, the United Kingdom, Japan, the European Union, Sweden, and Switzerland just joined hands with the BIS to research CBDCs in tandem.
The BIS has formally backed the launch of CBDCs across the globe, but has said asserted that it isn’t the biggest fan of Bitcoin or more decentralized digital assets.
All this was done to seemingly force discussion around CBDCs at Davos — not to mention, there were a number of events and speeches focused on the rise of digital currency.
Leading CBDC Projects
With CBDCs becoming all the rage as of late, it is important to look at which countries and central banks have a stake in this race, if you want to call it that anyway:
- France’s finance minister late last year revealed its intent to launch a pilot digital currency project in the first half of 2020.
- China is expected to be the first country to launch a CBDC, with reports indicating that there will in the next few weeks be a pilot testing a digital currency in certain cities, including China’s version of Silicon Valley, Shenzhen.
- The Bank of Canada was recently presented on a CBDC, though officials there have made no indication that a pilot currency is on its way.
- The U.S and the Federal Reserve’ representatives have shown hesitance to go ahead with researching cryptocurrency. Though, there are some efforts being made to research a digital dollar.
- Venezuela technically has its own cryptocurrency, the “Petro.” Though, there is little information about the usage of the asset.
- Documents have suggested the Reserve Bank of India and other financial authorities are looking into the creation of a Digital Rupee.