In this article, We learn about "Central Bank Digital Currency (CBDC) ".Let's Go!
A Central Bank Digital Currency (CBDC) is backed by a government central bank, which means they bear the responsibility, not your private bank.
As decentralized digital currencies like Bitcoin become more popular, central banks around the world are starting to realize they need to get involved or let the evolution of money pass them by.
What is CBDC?
Central Bank Digital Currency (CBDC) is the digital form of a country's legal tender and a claim on the central bank.
The central bank no longer prints money, but issues electronic coins or accounts backed by the full trust and credit of the government.
CBDC is the responsibility of the central bank, which means that the government must maintain reserves and deposits to back it, not private banks.
The Riksbank is by far the central bank doing the most work on this topic, and the European Central Bank is also moving quickly.
The Bank for International Settlements has released a joint report with Sweden’s Riksbank, the Federal Reserve, the European Central Bank, the Bank of England, the Bank of Japan, the Bank of Canada and the Swiss National Bank, discussing the core features of a CBDC.
Recently, the People’s Bank of China (PBOC) issued $10 million worth of digital yuan to 50,000 people in the Shenzhen area.
The move is the latest in a series of trials testing China’s new Digital Currency Electronic Payments (DCEP).
The People’s Bank of China (PBOC) has released a draft law giving legal status to the Digital Currency Electronic Payment (DCEP) system and allowing the digital yuan to be circulated and exchanged like physical currency for the first time.
The central government clearly stated that the goals of DCEP include replacing cash, maintaining government control over currency, and creating as many small retail application scenarios as possible.
China also seeks to internationalize the renminbi by strengthening its use in international settlements.
Further progress in CBDC implementation may improve
Issues related to the impact of monetary policy and exchange rates.
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