The last two months of 2022 were?no less than historic for India¡¯s central bank, i.e., the RBI. In November and?December, RBI launched the pilot project for the digital rupee in the wholesale segment and retail segment, respectively.
While the adoption of the digital rupee may take more time as UPI and net-banking are already popular and present challenges for the e-rupee to make a space for itself, besides the fact that the rollout of the digital rupee is still in its pilot phase.
But did you know that India is neither the first nor the only country to launch an ambitious pilot project for its digital currency?
Are you eager to know which countries?have launched their pilot projects for digital currency to date? Read on as we list such countries.??
In 2020, the island nation launched the world's first central bank digital currency, or CBDC, called the?Sand Dollar.?The Sand Dollar is the digital version of the Bahamian dollar (B$). The sand dollar, like cash, is issued by the Central Bank of the Bahamas via authorised financial institutions (AFIs).
It allows greater flexibility and accessibility for residents that want to participate in financial services via either a mobile phone application (iOS and Android) or a physical payment card to access a digital wallet. It also provides an excellent record of income and spending, which can be used as supporting data for microloan applications.
The Bahamas currently has a fully operational digital currency.
On October 25, 2021, Nigeria launched its CBDC project. The currency is called the eNaira, and it was launched under the leadership of President Muhammad Buhari. eNaira is a central bank digital currency (CBDC) backed by law and the full sovereignty of Nigeria, issued by the Central Bank of Nigeria as a legal tender.
It is the digital form of the naira and is used just like cash. The eNaira wallet is a digital storage device that holds the eNaira. The eNaira wallet is required to access, hold, and use eNaira. The eNaira is a unit of account, a store of value, and a medium of exchange.
China launched its CBDC pilot program in 2020, but had been exploring a potential digital currency since 2014.
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The digital yuan, or e-CNY, was also introduced to visitors at the Winter Olympic Games in China last year in February. They could exchange their foreign fiat currency for CBDC cards preloaded with e-CNY. They could then use this card to pay for products and services in the Olympic Village, just like they would with physical currency.
China's new digital currency, the e-CNY, was reportedly used to make 2 million yuan ($315,761) or more in payments a day in its pilot at the Beijing Winter Olympics, a top official from the Chinese central bank (PBOC) said.
In September 2022, China also released the new?digital yuan app, and as of August 2022,?transactions using China's?digital yuan had already surpassed 100 billion yuan ($13.9 billion).
While the?US?has yet to roll out its digital currency's pilot project, it was recently confirmed that the United States is developing a bank-to-bank digital currency.
Speaking at the Singapore FinTech Festival on November 4, 2022, a senior official from the New York Federal Reserve announced that for the past several months, the New York Fed has been developing a "wholesale" central bank digital currency (CBDC) designed to speed up transfers between banks around the world.
According to recent Atlantic Council research, the United States has begun to develop a central bank digital currency. So, the world may soon see the US introduce its pilot project for digital currency.
In June 2022, the Bank of Jamaica (BoJ) legalised central bank digital currency (CBDC)?in a move to provide an alternative to its cash-based economy.
Jamaica¡¯s central bank recognised "Jam-Dex" as a legal tender. As per a Bloomberg report, the nation has been piloting the e-currency since 2021. The logo for the Jam-Dex is a stylized image of Jamaica's national fruit, the ackee.
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In October 2022, the Central Bank of the?United Arab Emirates (CBUAE) said that it had completed the world's largest pilot of central bank digital currencies (CBDC) transactions, with other regulators including the People's Bank of China's Digital Currency Institute.
"The project mBridge demonstrated faster, cost-effective, and more secure cross-border monetary settlements using central bank money, which was identified as a G20 economic priority," CBUAE said, as per a Reuters report, adding it would be positive for regional and international trade as well as participating entities.
The six-week pilot project was conducted with the Hong Kong Monetary Authority, the Bank of Thailand, the Digital Currency Institute of the People's Bank of China, and the Bank for International Settlements.
In August 2021,?Bank of Ghana partnered with Giesecke+Devrient (G+D) to pilot first general purpose Central Bank Digital Currency in Africa. As per their joint press release,?G+D is providing the technology and developing the solution adapted to Ghana¡¯s requirements, which will be tested in a trial phase with banks, payment service providers, merchants, consumers and other relevant stakeholders.
For the uninitiated,?Giesecke+Devrient (G+D) is a?German company headquartered in Munich that provides banknote and securities printing, smart cards, and cash handling systems.
Last year,?Malaysia¡¯s central bank had said that the country?is assessing the potential benefits of adopting a digital currency.
As per Bloomberg report, Bank Negara Malaysia said?¡° it is actively assessing the value proposition of central bank digital currency (CBDC) to Malaysia. While a decision has not been made to issue CBDC, we have focused our research on CBDC via proof-of-concept and experimentation to enhance our technical and policy capabilities, should the need to issue CBDC arise in the future.¡±?
In November 2022,?The Monetary Authority of Singapore (MAS) launched?Ubin+, an expanded collaboration with international partners on cross-border foreign exchange (FX) settlement using wholesale central bank digital currency (CBDC). As per MAS,?Ubin+ will focus on?studying business models and governance structures?for cross-border foreign exchange (FX) settlement, develop technical standards and infrastructure?to support cross-border connectivity, interoperability and atomic settlement of currency transactions, and?establish policy guidelines.
In August 2022,?Thailand's central bank said that it expected to test its retail digital currency from late 2022 to the middle of 2023, as an alternative payment option.
During the?testing, as per Reuters report, the retail central bank digital currency (CBDC) will be used in conducting cash-like transactions, like paying for goods and services, within limited areas and among about 10,000 retail users, the Bank of Thailand (BOT) had said in a statement.
Besides these countries, the Organization of Eastern Caribbean States'?Eastern Caribbean Central Bank (ECCB) launched its historic DXCDCaribe pilot, on 12 March 2019. ¡®D¡¯, representing digital, is prefixed to ¡®XCD¡¯ - the international currency code for the EC dollar.
The pilot involves a securely minted and issued digital version of the EC dollar - DCash. The objective of this pilot is to assess the potential efficiency and welfare gains that could be achieved: deeper financial inclusion, economic growth, resilience and competitiveness in the ECCU - from the introduction of a digital sovereign currency.
DCash is issued by the ECCB, and distributed by licensed bank and non-bank financial institutions in the Eastern Caribbean Currency Union (ECCU). It will be used for financial transactions between consumers and merchants, people-to-people (P2P) transactions, all using smart devices.
Then in finally March 2021,?the Eastern Caribbean Central Bank launched?DCash,?making it the first monetary union in the world to use a central bank digital currency, or CBDC??
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