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The Digital Currency Battle…

As I discussed in a recent post Australia is starting to look at a Central Bank Digital Currency programme, with a focus on retail customers. The design parameters and business case are yet to emerge, and I hope there will be considerable consultation around privacy, free choice and the continued used of cash.

Around the work, work on CBDC’s are progressing. China’s e-CNY, or digital yuan, project is essentially ready to go, with the country going slow to ensure mass adoption is effectively in place before the launch, on which it has placed a lot of prestige.

The European Central Bank (ECB) has been an enthusiastic supporter of a digital euro, calling it “the holy grail” of cross-border payments. “To ensure financial stability in this digital age, it is crucial that we all still have easy access to central bank money, which is the foundation of our currency,” ECB President Christine Lagarde, said in July. “The digital euro can achieve that.” The ECB’s crypto front man Fabio Panetta said in May that a digital euro could launch within four years.

India and Russia are planning CBDC launches sooner than that, with India saying a CBDC could launch as soon as 2023. Almost all the G20 members are working on a CBDC to some degree. Sweden, South Korea, Thailand, Malaysia, Saudi Arabia and Brazil are all fairly advanced, while Africa’s largest country, Nigeria, launched its eNaira CBDC almost a year ago. Both South Africa and Ghana have live pilots up and running.

And more than a few governments have been clear that challenging the dollar’s hegemony is a goal, with the ECB’s Lagarde saying a “digital euro would also help to avoid market dominance.”

So you could argue that Central bank digital currencies (CBDCs) have reached a critical mass, and enough major economies are challenging the greenback’s status as the world’s reserve currency (and all the power that comes with it) to shift the debate to matters of national prestige.
Which then takes us to the US, where things are also getting started.

To that end, I want to discuss remarks made by Fed Governor Michelle Bowman where she suggested that she believes the FedNow real-time payments system will make a digital dollar unnecessary.

But, perhaps the arguments that the U.S. will need a CBDC to defend the dollar’s place as the world’s reserve currency are winning, for reasons that have nothing to do with an actual need for a digital dollar or real-time payments. The financial superpower can’t afford to be left behind.

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Written by Walk The World

Comments

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  1. so let me get this straight… the company/ group of people that have deliberately mismanaged our current state of economic affairs to the point that they are actually stealing straight in front of your face … have thought they can fix things with more control by giving us plebs less?…. "look we know we stuffed it up for you ..we did alright out of it but we can fix it"…. oh ok that sounds good?…. i have a couple of fingers for ya … guess which ones?

  2. Could someone explain to me (as if explaining to a 5 year-old), what the benefit of a central bank digital currency is? Don’t we already do transactions digitally? I’m confused. Who would be responsible for creating credit? And what’s to stop financial transactions settling instantly now 24/7?

  3. Wait, so the instant payment system I've been using for at least a decade in the UK has yet to be unveiled in the USA? Do those guys still use cheques and cash for everything?

  4. No one asked for a CBDC, no one wants a CBDC. Fiat is bad enough but programmable, centralised cripple coins are worse. Decentralised cryptocurrencies like Bitcoin will be a refuge from CBDC's and will allow parallel societies to thrive.

  5. Let me laugh… hahahah wait let me laugh even harder… HHAHAHAHA. Crypto as I was telling my friend the key countries will want control of currency and won’t let go and adopt non controlled crypto.

  6. All hail the new super power and supreme leaders of a dictorial world. If Australians are willing to swallow 196 taxes that increase twice yearly then this should cement our future. Case in point Alcohol, Cigarettes, fuel excises rake in billions and no one blinks. Klaus Schwabs dream is coming to fruition. Well done.

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