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This article summarizes the latest developments in the digital currencies of the central banks of 16 countries.

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Didi, Meituan Dianping and bilibili (bilibili) have all partnered with a number of banks involved in digital currency projects, Caixin reported on July 8. Among them, Meituan Dianping may try to expand the use scene such as Meituan bike, while the cooperation between bilibili and the participating bank has entered the stage of technological development. In addition, companies such as byte jump are also discussing the possibility of cooperation with banks.

A few days ago, the Institute of Digital money of the people’s Bank of China formally reached a strategic cooperation agreement with DiDi to jointly study and explore the scene innovation and application of digital RMB in the field of smart travel, Beijing Business Daily reported on July 8. The two sides hope to establish a cooperative relationship to promote the platform ecological construction of digital RMB in diversified travel scenarios. At the same time, the Institute of Digital currency of the people’s Bank of China recently released the “Digital Research New Star Program” internship recruitment, recruiting interns in Beijing, Shenzhen and Suzhou.

In early June this year, Bank of Japan Governor Toshihiko Kuroda again said that the Bank of Japan has no plans to issue digital currency for the time being. According to previous news, Toshihiko Kuroda said many times in 2019 that Japan does not need to issue central bank digital currency for the time being, but will continue to study digital currency. Not long ago, on July 2, the Bank of Japan released a summary report on digital currency technology. The Bank of Japan defines digital money as “a means of settlement that anyone can safely and reliably use anywhere at any time”. In addition to making it available to the elderly who do not have smartphones, the Bank of Japan has also proposed an offline settlement function to ensure transactions in the event of communications and power outages caused by disasters.

In early July, European Central Bank Executive Board Leon Panetta said the central bank’s digital currency, (CBDC), could have an impact on monetary policy. The ECB is a pioneer in exploring the possibility of the central bank’s digital currency (CBDC) program. The global potential of the euro has not yet been fully unleashed, but the right policies can unleash it. In addition to the direct impact of the epidemic crisis, the acceleration of the digitization of monetary policy may have an impact on the global status of the euro. The central bank’s digital currency will have an impact on the euro in the areas of monetary policy, financial stability and payment systems, which requires a thorough assessment. If central bank digital money is allowed to be used outside the euro zone, it is also likely to have an impact on the global monetary and financial system.

In late June, the Italian banking association (ABI), made up of more than 700 Italian banking institutions, expressed its willingness to participate in the digital euro pilot, hoping to help accelerate the implementation of digital currencies backed by the European Central Bank by participating in projects and experiments.

South Korea.
South Korean bank (BOK) set up a legal advisory group on the central bank’s digital currency (CBDC) on June 15 to help review legal issues related to the possible future issuance of such currencies, according to Yonhap news agency. However, the Bank of Korea said that the move does not mean that preparations have been made for the actual launch of digital currency, it is just making the necessary preparations, just in case. According to previous reports, the Bank of Korea announced its medium-and long-term development strategy “BOK 2030” on June 9. The strategy mentions that the Bank of Korea is upgrading its research capacity to cope with the rapidly changing global economic and financial environment and is actively engaged in the research and preparation of digital currencies.

Earlier news, the Lithuanian central bank is testing a central bank digital currency (CBDC). The digital currency, LBCoin, is based on the NEM blockchain and is scheduled to be launched in July. The Bank of Lithuania has conducted blockchain experiments for more than two years. However, the digital currency is a commemorative digital token that almost no one can use. Officials say no shopkeeper has the e-wallet necessary to accept LBCoin. Andrius Adamonis, the bank’s head of innovation and blockchain project manager, says LBCoin will be a very interesting project because some say it is like a small-scale trial of CBDC.

On July 2nd Lithuania said it would launch LBCoin, the first digital currency produced by the central bank, in the euro zone. Pre-sale will begin next week. Each token contains a portrait of one of the 20 people who signed the Lithuanian Declaration of Independence in 1918 and will be sold in a package of six for a total of 24000 at a price of 99 euros. Marius Jurgilas, deputy governor of the Lithuanian central bank, said that LBCoin is very similar to the so-called central bank digital currency (CBDC), putting Lithuania at the forefront of the development of legal tender.

At a press conference on the morning of July 9, the Lithuanian central bank displayed the digital commemorative coin LBCoin,. The central bank also launched, an electronic store specially set up for the LBCoin project. Marius Jurgilas, a member of the board of directors of the Bank of Lithuania, said: “Today, we have opened a new chapter in the history of money science and further explored the potential of the central bank’s digital currency (CBDC). LBCOIN may be the most advanced testing ground for testing different avatars of CBDC at a time when the central bank is starting to change its view on digital money. “

In early July, David Treat, senior managing director of Accenture (Accenture), head of the global blockchain and co-head of the digital dollar program, said that once the project was approved and launched, the US could quickly enter the central bank’s digital currency pilot. In response to a reporter’s question “when will we see the Fed have its own CBDC pilot”, he said he hoped it would be available soon, and said, “from the beginning, within a few quarters, you can have real work cases in the real world, and it is easy to imagine that people can use wallets on their phones and exchange tokens in a certain context. As a result, the first pilot use case can be completed in months and quarters and does not take years or more. “

At the end of June, experts from Kazakhstan, Russia, China and other countries gathered on the 2020 Astana online Financial Day to discuss the digital currency plans and strategies of relevant central banks. The development of blockchain technology gives new practical significance to digital currency. In May 2020, Kazakh presidential adviser Moussin proposed the introduction of blockchain technology and digital tenge, aimed at combating corruption and ensuring transparency in the allocation of state budget funds. In June, Kazakhstan adopted the outline for the Development of Block chain and Digital Technology. In 2019, the Kazakh digital currency mining project will attract 82.6 million tenge, and the scale of investment will be increased by another 80 million tenge in 2020.

At present, the central bank of Kazakhstan is demonstrating the feasibility of introducing digital tenge. Zalenov, adviser to the governor of the Central Bank of Kazakhstan, believes that the main task of the central bank is to maintain the inflation target and financial market stability, the digital currency solution is secondary, and the key is to ensure that the design of the digital monetary system is consistent with the monetary policy objectives. Kaliev, development manager of (AIFC) of Astana International Financial Center, said that AIFC is willing to provide testing support and legal basis for the introduction of digital currency in Kazakhstan. Prior to this, Kazakhstan has formulated a scheme for the storage and circulation of encrypted currencies to standardize the storage and circulation of virtual currencies through professional platforms. The AIFC protocol has included terms commonly used in the cryptocurrency market, such as virtual currency and its classification, intelligent contracts, digital wallets, and so on.

“the Bank of Canada is embarking on a socially significant project to design a temporary system for CBDC that can be seen as banknotes, but in digital form,” the Bank of Canada wrote in a job advertisement for a project manager in a recruitment announcement issued by the Bank of Canada on June 11.

According to the job advertisement, CBDC in Canada should protect the privacy of users (although it is less private than cash), make it available to people who do not have bank accounts or mobile phones, and can work in the event of a power outage, which is as secure as paper money to gain the trust of the cash-holding public. In addition, the central bank wants its CBDC to be based on a framework that “may have a development life span of decades” and to develop in line with policy objectives. However, other technical details have not yet been determined. The bank did not specify the technologies its CBDC might use, such as whether it uses a token-based or account-based model, or how to create an electronic money that can run in the event of a power outage. These details will be formed during the three-year term of office of the position. In the meantime, the central bank also hopes to establish a “CBDC pilot system”.

In an analysis on June 30th, Bank of Canada experts said the CBDC should mimic the characteristics of ordinary paper money. This means that urban, rural and remote communities can enjoy this service with or without bank accounts. With or without smartphones, people can use CBDC to trade, even during power outages, whether they have Internet access or not. Earlier, the Bank of Canada released an employee analysis report that showed that zero knowledge proof and similar blockchain network privacy encryption methods were still in their infancy and were not ready to be widely used in the central bank’s digital currency (CBDC) system.

On June 24th the Swedish central bank studied the feasibility of the central bank’s digital currency (CBDC) in its own market. In a 96-page economic report updated on June 18th, the central bank proposed four models for providing an electronic version of the Swedish krona and outlined how different models met its policy objectives. These goals include promoting stable storage of value and accounting units, becoming the lender of last resort ((LOLR),) to provide secure means of payment and settlement, and providing tools to maintain financial stability. Under this background, the four modes in the study include “central electronic krone supply mode without intermediary”, “centralized electronic krone supply mode with intermediary”, “distributed solution with intermediary” and “synthetic electronic krone”.

On June 18, the 12th Lujiazui Forum opened in Shanghai. Meng Wenneng, Director of the Monetary Authority of Singapore, said in a round-table discussion that CBDC is a very hot topic at present, and the people’s Bank of China is very active in exploring this field. Singapore and the people’s Bank of China have a lot of exchanges, and the two sides are discussing the landing scenarios related to CBDC. In Meng Wenneng’s view, although the motivation for developing CBDC varies from country to country, attention should be paid to the use scenario. On June 24, on the question of cooperation with China in the field of digital currency, a spokesman for the Monetary Authority of Singapore said in response to reporters that the Monetary Authority of Singapore has been exploring the use of wholesale central bank digital currency to improve the efficiency of cross-border payments through Ubin projects. Many central banks are engaged in similar projects and can learn a lot from each other. The HKMA has been holding extensive discussions with the people’s Bank of China on the development of financial technology and looks forward to continuing to explore new areas of cooperation.

(NBC), the National Bank of Cambodia, released a white paper based on the blockchain payment project Bakong in late June. The Bank of Cambodia said Bakong would help reduce the dollar the country’s dominant blockchain technology by allowing Cambodians to use QR codes and mobile apps instead of traditional paper money payments., Hyperledger Iroha’s blockchain technology will help enable real-time money transfers between bank accounts and digital wallets. The white paper revealed that the project could operate between Bakong digital accounts and traditional accounts, keeping accounts in distributed books, using a consensus mechanism called “Yet Another Consensus”, with each transaction time of five seconds or less. At the same time, the throughput of the network is between 1000 and 2000 TPS, which depends on the technical specifications. At the same time, the project has the potential to expand its capacity.

In mid-June, the Bank of Thailand announced a project to develop a prototype commercial decentralized payment system, becoming the latest monetary regulator to join the central bank’s digital currency (CBDC). The prototype of the Bank of Thailand’s CBDC will be based on the Inthanon project, a distributed ledger project launched by the Bank of Thailand in partnership with the country’s eight major commercial banks. The scope of the project will include conducting feasibility studies and developing an innovation platform that integrates CBDC with enterprises, the announcement said. The new prototype project is scheduled to begin next month and is expected to last until the end of the year, when the Bank of Thailand will release a summary and results of the project.

The Venezuelan government announced on June 12th that nearly 15 per cent of fuel payments at gas stations across the country had been paid in petroleum coins in the first week of the new plan to promote the use of (Petro). Earlier, the government had asked all gas stations in Venezuela to accept the country’s cryptocurrency Petro as payment.

In mid-June, the Central Bank of Belarus will allow 12 state-owned and commercial banks to pilot issue digital tokens and conduct business in a high-tech park. The project will run from January 1, 2021 to January 1, 2024, with participating banks including Belarusian-Swiss Bank and Belarusbank, the country’s largest bank. Banks will be allowed to raise funds from domestic companies or individuals to issue Belarusian rouble tokens, according to a document obtained by media sources from the central bank. The central bank also said that non-citizens can use domestic legal currency and foreign legal currency to buy tokens, but banks cannot accept digital currency. In addition, banks must not invest more than 10% of their total capital in token issuance projects, and only companies or individuals registered in the high-tech park can use the new tokens for transactions.

Christina Segal-Knowles, executive director of the Bank of England’s financial market infrastructure, said in June that the COVID-19 pandemic had exacerbated the existing trend of reduced cash use. ATM withdrawals in Britain have plummeted since the country imposed a blockade in March to crack down on novel coronavirus, as stores insist on contactless payments in some cases. She said the Bank of England had published a discussion paper on potential CBDC, arguing that the use of CBDC could include cutting cross-border payments, such as remittances. The Bank of England is actively exploring because of the potential opportunities for CBDC, Segal-Knowles said.

Maxwell Opoku Afari, chief deputy governor of the Bank of Ghana’s (BoG), said at a seminar on June 8th that the bank was still committed to experimenting with (CBDC), the central bank’s digital currency. This spring, the Central Bank of Ghana established the Office of Financial Technology Innovation to respond to major changes in the payment industry. Although some methods have been adopted to encourage e-cash transactions, Opoku Afari stressed that the specific CBDC pilot scheme still has a solid foundation.

These are the latest developments of the central bank digital currency from June to early July. From the above news, we can see that many countries have made substantial progress in the research and development of the central bank digital currency, and circulation and use may be just around the corner. Of course, many countries are still doing further research and judgment on the central bank digital currency CBDC, as well as analyzing the feasibility of its issuance, and so on. More about the latest news of national CBDC and the follow-up development trend.

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