Europe, Japan, Russia: countries around the world are accelerating CBDC projects

The European Central Bank confirmed the possible issue of a digital euro. The final decision will be made by mid-2021. Meanwhile, Japan moved on to the second phase of its CBDC project.

The European Commission and the European Central Bank (CB) issued a joint statement on a possible digital euro issue.

“Taking account of digitalization, rapid changes in the payments landscape and the emergence of crypto-assets the ECB is exploring the possibility of issuing a digital euro, as a complement to cash and payment solutions supplied by the private sector,” the document reads.

The ECB will decide whether the digital euro project will be launched by mid-2021. The regulator will take into account the results of public consultations on this issue, which ended on January 12, 2021. In the course of the online survey, more than 8000 answers were received.

Fabio Panetta, a member of the Executive Council of the ECB and Chairman of the target group for the digital euro, said that the ECB analyzed the benefits, risks and problems associated with the launch of CBDC. “The high number of responses to our survey shows the great interest of Europe’s citizens and firms in shaping the vision of a digital euro. The opinions of citizens, businesses, and all stakeholders are of utmost importance for us as we assess which use cases a digital euro might best serve.”

The ECB also stressed that the digital euro is not a cryptocurrency. Unlike cryptocurrency, the digital euro will not have volatility problems and will serve as an analogue of paper money.

Meanwhile, the Bank of Japan is preparing to move to the second phase of the digital yen project. According to the Japanese newspaper Sankei, in the spring of 2021, the Bank of Japan will implement additional functions of CBDC in the test environment developed in Phase 1 and test their feasibility. The third and final phase of the project supposes the practical launch of the pilot with the participation of private businesses and consumers who will use the digital yen.

In Russia, commercial banks are trying to estimate the cost of modernizing infrastructure to launch the digital ruble. To adapt the payment infrastructure to work with the digital ruble, both software and hardware will have to be modernized. According to Sberbank, largest Russian bank by number of clients, only the security system for the digital ruble will cost 25 billion rubles for the Central Bank and commercial banks. Russian commercial banks association chairman Viktor Dostov noted that before deciding on the implementation of the digital ruble, it is needed to understand what tasks it will solve, how to finance the project and who will bear the costs.


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