National and regional governments around the country have been exploring Central Bank Digital Currencies (CBDCs), developed by Distributed Ledger Technology (DLT). CBDCs are similar to cryptocurrencies, but they are issued and supervised by a regional central bank or monetary authority; They are linked to the legal value of the issuing country or region.

Some central banks and monetary authorities are still at the research stage of CBDC, while other companies have begun to test various technical solutions for their CBDC.

One of the highest monetary authorities dedicated to the creation and issuance of CBDCs is the European Central Bank. On November 7, the European Central Bank and the European Commission jointly held the Digital Europe Conference; The meeting only focused on the topic related to the establishment of European CBDC, Digital Euro. The research phase of the figure Euro started about a year ago.

CBDC in emerging markets

The yearning for digital currency has also spread to emerging markets. In the latest publication, the survey document of the Bank for International Settlements, written by Enrique Albertola Ila and Ilaria Mattei, recorded the responses of 19 African central banks; The Survey analyses the development, motivations and concerns of commodity based developing countries in Africa relative to other emerging and developing regions.

All African central banks surveyed in the report said that they were analyzing CBDCs. However, only a few have started to establish an actual CBDC system. African governments and central banks have long been exploring ways to introduce digital savings and settlement to many citizens without bank accounts. Mobile payment service, mainly by telecom operators, is very popular in sub Saharan Africa and has become the preferred financial service. The GSMA report shows that Africa accounts for 70% of the US $1 trillion mobile money market. Despite the success of mobile money in Africa, half of the central banks surveyed by the Bank for International Settlements believe that CBDCs can provide better solutions for mobile money. Like the central banks in other regions, the African Central Bank is also exploring banks in developing countries to improve the efficiency of the payment system.

The Central Bank of Nigeria is the only African monetary authority issuing retail CBDC; On October 25, 2021, CBN launched a CBDC called eNaira.

Bank of Ghana (BOG), the central bank of Ghana, also started the pilot phase of its retail CBDC. BOG cooperates with Giesecke+Devrient (G+D), a security technology company headquartered in Munich, to develop its CBDC.

According to Bloomberg's press release, in February this year, the Bank of Zambia announced that it would complete the research on the establishment of CBDC by the fourth quarter of 2022.

As an experimental project, the Reserve Bank of South Africa (SARB) piloted the Hoka project to evaluate the performance, scalability, privacy, flexibility and finality of blockchain based solutions in the real banking industry under real conditions. SARB and seven other South African banks formed a consortium to create an inter-bank system headquartered in the blockchain - the quorum of Hoka Project, and the open-source enterprise blockchain platform of ConsenSys. South Africa has also participated in the Dunbar Project, a multi currency project of the Bank for International Settlements, to explore the possibility of cross-border settlement using different CBD. Other partners in the Dunbar Plan are the central banks of Australia, Singapore and Malaysia.

The Central Bank of Kenya (CBK) released a discussion paper in February, which examined the applicability of CBDC in Kenya. This document highlights the potential and known risks associated with initiating CBDC. In the discussion document, CBK suggested that the focus of CBDC innovation must be on functions and the problems it solves for people, not on underlying technologies.

CBDC projects in C ô te d'Ivoire, Madagascar, Namibia, Rwanda and other African countries are still in the exploratory stage. The Central Bank of Madagascar has launched the electronic Ariary project of CBDC at the research stage, named after its national currency. In June 2021, the National Bank of Rwanda announced that it was studying the possibility of issuing its own CBDC; This study is expected to include the expectation that the government will announce its position on issuing CBDC at the end of December.

Global development of CBDC

Data from the Atlantic Council shows that many countries are exploring alternative international payment systems. The main findings of the website show that 105 countries accounting for 95% of the global GDP are exploring CBDC; 19 countries in the G20 are exploring CBDC. Several CBDC pilot projects have been launched because countries seem to be competing for the future of money.

The Bank for International Settlements, in cooperation with the Hong Kong Monetary Authority, the Bank of Thailand, the Digital Currency Institute of the People's Bank of China and the Central Bank of the United Arab Emirates, has launched the multi CBDC bridge project, also known as the mBridge project, which aims to eliminate the pain and friction currently encountered in the cross-border settlement system by creating a public platform for multiple CBDC settlements. Mbridge is a technical sharing platform that directly connects multiple digital central bank currencies. In the latest BIS report, the Bank for International Settlements of the mBridge project said that it had created a new proprietary blockchain called the mBridge ledger; According to the Bank for International Settlements, the new block chain network customized for central banks has been tested for real value transactions among 20 commercial banks from four different jurisdictions.

Other interesting CBDC events also occurred in Europe. The Bank of France and the Central Bank of Luxembourg, the monetary authorities of the two countries, together with the European Investment Bank (EIB), carried out a settlement test of the Venus Plan, which was conducted through the token platform operated by Goldman Sachs є 100 million bonds are settled using CBDC. This is a bold step in the development of digital native bonds.

Ricardo Mourinho Felix, vice chairman of EIB, said: "Blockchain is likely to subvert a wide range of fields. It plays a central role in the success of Europe's green and digital transformation, and strengthens our technological sovereignty. Innovation is part of EIB's identity, and the issuance of such all digital bonds is another important step to help develop an all digital ecosystem."

The National Bank of Ukraine launched the research phase of the "electronic hryvna" project last September. In a notice issued on November 28, Oleksiy Shaban, Vice President of the National Bank of Ukraine, said: "The development and implementation of the electronic hryvna may be the next step in the development of Ukraine's payment infrastructure. This will contribute to the digitalization of the economy, the further popularization of cashless payment, the reduction of costs, the improvement of transparency and the general trust in the national currency."

Ukraine has experienced the benefits of digital assets firsthand because it has received millions of dollars worth of cryptocurrency donations to support its ongoing war with Russia.

The Reserve Bank of India also said it would start testing its retail CBDC digital rupees. The test will first be conducted in four cities - Mumbai, New Delhi, Bangalore and Bhubaneswar - and then extended to nine other cities.

Governments and central banks in all continents are using the power of distributed general ledger technology, especially blockchain; There is no doubt that this emerging technology and its asset class will continue to exist.