Despite the dire state of cryptocurrencies right now, relatively few individuals are skeptical about their future. Cryptocurrencies will, in fact, become a permanent fixture in the economic landscape, whether we like it or not. Applications and utilities for cryptocurrencies will continue to diversify. Governments are responding to this achievement. Many people are engaged in a CBDC initiative. Russia and Zimbabwe have just exchanged the most recent details regarding their CBDC project.
Describe a CBDC.
The acronym CBDC, which stands for “Central Bank Digital Currency,” is an anglicization. Therefore, a CBDC is an electronic currency controlled by a central bank in French. Therefore, a CBDC is an electronic currency in the same sense that a crypto is. Some CBDCs will use blockchain technology to conduct business, while others won’t. The essential difference between a CBDC and a traditional fiat currency, however, is that a CBDC is still wholly administered by a central bank.
The CBDC is a global initiative that is being worked on by numerous nations. Thus, research is currently being done on the electronic euro (or e-euro) or even the electronic dollar. While still in the experimental stage, China’s electronic yuan is significantly more advanced than its counterpart. A CBDC project is now in development in over 80 nations. Nine nations had already formally inaugurated their CBDC as of March 2022:
- The Bahamas;
- Antigua and Barbuda;
- St. Kitts et Nevis ;
- Montserrat;
- Dominique ;
- St. LUCIA ;
- St. Vincent and the Grenadines;
- Grenade ;
- Nigeria.
Let’s now focus on Zimbabwe and Russia in particular, both of which recently presented an update on their respective CBDC projects.
Zimbabwe’s “implementation of a CBDC”
In Zimbabwe, things are moving quickly! In fact, the Central Bank only announced its desire to create a CBDC six months ago. His claims suggest that the roadmap is now locked up, though. Recall that in November 2021, the government decided to start working on a CBDC project.
As of right now, the Bank has just begun a public consultation on the CBDC. The Bank has just created a comprehensive paper that resembles a white paper as the foundation for the consultation. Within 90 days after the document’s release, comments will be collected.
- “The role of stakeholders in the CBDC journey is paramount and in this regard, the Bank has developed a public consultation document on CBDCs which will be published shortly. The consultation document aims to foster a broad and transparent public dialogue regarding the potential benefits and risks of CBDCs. » John Mangudya, Governor of the Central Bank of Zimbabwe.
A CBDC by 2024 for Russia?
Various nations, identical project! Information regarding the CBDC was just made public by the Central Bank of the Russian Federation (CBR). The Bank has released a document that outlines the key objectives of its monetary policy for the following three years. However, “the adoption of a digital form of the national fiat currency” is one of the specified goals. By this, I mean the creation of an electronic ruble known as a CBDC.
- “In 2024, the Bank of Russia will begin to gradually connect all credit institutions to the digital ruble platform and increase the number of payment options and transactions available using smart contracts. Central Bank of the Russian Federation (CBR)
By 2025, the electronic ruble is expected to be fully operational. However, the introduction of the digital rouble’s first applications won’t come until 2025. In fact, the government wants to integrate its CBDC more quickly. The cause? Some would have expected the administration to move more quickly if western sanctions had been imposed after the fighting in Ukraine. Thus, a detailed strategy is anticipated by the end of 2023. Additionally, full-scale tests will be conducted in April 2023, according to the Central Bank of the Russian Federation (CBR).
