The Bank of Japan has recently released a report detailing the results and findings of their central bank digital currency (CBDC) initiative. The bank started its first phase of the “proof of concept” in April 2021, and the second phase followed a year later to evaluate new technologies and accounts provided by various intermediaries. This pilot program comes as more and more countries are exploring the possibility of launching a CBDC, with the Atlantic Council tracking CBDCs in 120 different nations.
Eleven countries, including the Bahamas and Nigeria, have already introduced a CBDC, while 18 others, such as Japan, India, and China, are in pilot stages. According to the Atlantic Council, over 20 countries are expected to make significant strides towards piloting a CBDC in 2023, with countries like Australia, Thailand, Brazil, India, South Korea, and Russia planning to commence or continue pilot testing. The European Central Bank (ECB) is also likely to initiate a pilot next year.
In the United States, the potential future of CBDCs has elicited mixed reactions among lawmakers. Republican Rep. French Hill of Arkansas and Democratic Rep. Jake Auchincloss of Massachusetts introduced a bill called the Power of the Mint Act this month, aimed at blocking the Federal Reserve from issuing a CBDC. Advocates for CBDCs argue that they can offer better financial services to citizens, while opponents assert that implementing a CBDC would be a breach of privacy.
Republicans Sen. Ted Cruz and Rep. Tom Emmer have also presented bills designed to prevent the Federal Reserve from issuing a CBDC directly to individuals. Although the Federal Reserve has not yet made a decision on whether to issue a CBDC, Fed Chair Jerome Powell indicated that the bank would need congressional approval.
The push for CBDCs across various countries highlights the growing interest in digital currencies and their potential role in the future of finance. However, concerns about privacy and the need for appropriate regulations and agreements with lawmakers present challenges that must be addressed. The global landscape regarding CBDCs will continue to evolve as more countries explore, pilot, and potentially adopt this new form of currency. As the world moves closer to a digital financial future, it becomes even more essential to consider both the potential benefits and drawbacks of CBDCs and navigate a path that best serves both citizens and national interests.
Source: Cryptonews
