The central banks of China, Russia and Jamaica are reporting on their progress in creating and developing their own digital currency, known as CBDC. In the case of China, the most advanced nation in this area, it is already implementing its currency in large shopping centres in Shanghai.
The digital currency of central banks, called CBDC for its acronym in English, are increasingly closer to becoming a reality worldwide. China, one of the largest world powers in the world, is the nation with the greatest advances and innovations in relation to the development of its own digital currency, called DCEP or, popularly, digital yuan.
Since last year, this country has implemented a large number of public tests of its digital currency; ranging from the creation of a digital wallet for mobile phones, the realization of digital transactions and payments with and without an internet connection, payments with the “touch” function, purchase-sale operations in ATMs, integration with e-commerce platforms such as JD.com, payment of tickets in the subway, development of physical wallets such as plastic cards for the elderly; and now, its integration in retail stores in New World City y New World Daimaru, two of Shanghai’s largest and most important shopping malls. As the planned launch date for DCEP draws closer, China’s central bank is stepping up testing for its future digital currency, in order to test it in all possible scenarios.
On the other hand, Russia has taken an important step in the development of a CBDC. The nation has just report The country's central bank is expected to present a full prototype of the new digital ruble later this year, and a series of pilot tests can then begin to demonstrate the usability and feasibility of creating the digital currency. Meanwhile, Jamaica is preparing to test its digital currency in December this year, and officially launch it in 2022.
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Accepting payments with CBDC
In China's previous public tests of its DCEP, it handed out digital red envelopes containing 200 digital yuan each to several hundred thousand citizens in different cities across the country, so they could make purchases of goods and products in stores authorized to transact with the digital currency. Even the Chinese e-commerce giant, JD.com (JingDong), integrated the CBDC to accept payments for purchases through its web portal.
Now, it is Shanghai's New World City and New World Daimaru shopping malls that are accepting payments in the digital currency. According to the local media, the two department stores and a food supplier are the first retailers in the city to accept the digital yuan. Although the adoption of DCEP payments is another of the Bank of China's public tests, over the weekend, these retailers processed several thousand transactions with the currency and saw their sales grow more than 10 times thanks to the implementation of the digital yuan.
Commercial banks participated in these tests. Bank of Communications and China Construction Bank, who handed out digital coupons of up to 150 yuan to reward users who paid for their purchases with the digital yuan.
China's central bank plans to continue integrating more pilot tests and more retail stores as the planned launch date for the DCEP approaches, planned for the 2022 Winter Games in February next year. With this currency, China seeks to improve its position and global status in international trade.
Digital ruble, a reality that begins at the end of the year
Deputy Chairman of the Central Bank of Russia, Alexey Zabotkin, reported that at the end of this year the entity will present a prototype of what will be the platform where the digital ruble will run, and that in 2022 it will possibly begin pilot tests of the country's future digital currency.
The prototype will allow the entity to develop a series of internal environments and tests for the digital ruble, without the need to carry out transactions with real money. In this way, the entity will be able to study and evaluate the development of its currency and ensure several aspects before starting with real public tests. Since last year, the Russian government approved the creation of a digital ruble, and has been holding consultations with interested parties to analyze the pros and cons of issuing and integrating a CBDC digital currency into the Russian economy.
Jamaica, transcending into a digital economy
The Caribbean island is preparing to begin pilot testing its Jamaican dollar digital currency later this year, with an official launch to follow in 2022. The Bank of Jamaica, BOJ, said the country’s new digital currency will be used locally and will be legal tender on the island. The BOJ also noted that as a “fiat” currency, Jamaica’s CBDC will be able to be exchanged for other fiat currencies, such as the US dollar, and even for real money.
Since last year, the country's government has been inviting payment providers to innovate in new technologies to develop solutions that enable new use cases for digital fiat currency, providing new development opportunities for investors and consumers, and its entire population in general.
So far, the Bahamas has been the first nation to officially launch a CBDC locally; although the launch of China's CBDC is one of the most anticipated in the world, due to its international aspirations and coming from a world power. On the other hand, the United States also recently confirmed that it will begin developing a CBDC for the dollar, and that it will bring together interested parties to discuss the incorporation of a CBDC into its current financial and monetary system, without harming it.
In Europe, several countries that make up the European Union are developing pilot tests for the cryptoeuro or digital euro. As we can see, financial digitalization is a need that is gaining greater relevance among the nations of the world. And although many governments do not publicly recognize it, the imminent arrival of a global digital currency by China is accelerating the adoption of this new form of money, as a measure to protect the financial stability and monetary policy of each nation.
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