Attempts and statements about the creation of a national cryptocurrency (CBDC) are made by representatives of different countries. Some are trying to stimulate the poorest economies, such as the disastrous story with Venezuela’s national cryptocurrency ElPetro. Strong economies such as China have other motives, like to overthrow the US dollar from its pedestal of the world’s means of payment. Will digital world currencies destroy the banking system, will their issuance affect the rate of bitcoin and altcoins? Experts at the decentralized financial (DeFi) ecosystem FreeTON tell about the five most anticipated cryptocurrencies and the possible consequences of their implementation.
Undoubtedly, the main thing in the very fact of the issuance of official digital cryptocurrencies by different countries is how their emission affects the financial sector, the world economy and the market of decentralized cryptocurrencies devoid of management and control. Experts at the DeFi ecosystem Free TON predict what the spread of national digital currencies can lead to.
“National cryptocurrencies have become widely discussed since 2019. It was then that the boom of projects such as Libra, Metal, Gram, supported at that time by the largest investors, drew the attention of the Central Bank and the governments of various countries. It was then that the question arose about the need to issue their own cryptocurrencies. Digital national money can become an alternative to existing cryptocurrencies for those who are afraid of strong volatility and incompleteness of legislative regulation of today’s cryptocurrency market,” the participants of the Free TON project comment.
The Free TON experts also note the ubiquity of digital money. As the “long-liver” of the cryptocurrency market, the DASH coin, has shown, the cryptocurrency can be adapted for use in any country, on the simplest mobile phones. And then there is no need for a network of bank branches or any other institutions except, in the case of the national cryptocurrency, the central bank.
“Also, the roll-out of a number of national cryptocurrencies, such as the Digital Yuan, during the use of sanctions by states, can help their legal circumvention,” experts at Free TON believe, “and it can also remove the leader of the world’s reserve currency, the US dollar, from its place. Generally, the Chinese government doesn’t hide that the main idea of the Digital Yuan is cross-border payments. And since 2020, Chinese officials are already being officially taught how to use it.”
Nevertheless, national digital currencies can hardly be called full-fledged cryptocurrencies in the near future. Since they are not decentralized, the emission of national cryptocurrencies will be controlled by central banks and regulators. This position can lead, if not to extinction, then to a clear reduction in the offline private banking system and to an increase in the role of regulators and central banks.
The Free TON experts note that the roll-out of a national cryptocurrency may also imply collecting a large amount of data on the people’s income and expenses in a convenient form. This can be both a plus and a minus for many economies. On the other hand, the transparency and accessibility of digital money also have an important social function. Thus, the European Union emphasizes that the Digital Euro can be indispensable, for example, for social payments to the population in times of mass disasters and catastrophes. It will be impossible to lose that kind of money. Also, all international transfers and transactions will become faster and cheaper.
“In a global sense, the issuance of some digital currencies, for example, the Crypto Yuan, can shake such a leader in fiat circulation as the US dollar. The more countries allow digital money, the more clear in the end the regulation of cryptocurrency relations in the world will be. This can lead to the fact that the proverbial Bitcoin becomes a less volatile cryptocurrency. And the market will become more predictable,” they note at the Free TON.
Also, the ecosystem’s representatives named five, in their opinion, the most anticipated world national cryptocurrencies. It is known that in the next six years, all major economies of the world – more than 20 countries – will issue their own digital money. The main challenge for states will be the data confidentiality.
1st place Crypto Yuan DC/EP (China)
Start of implementation: 2019
Stage: Testing and Pilot Use
Final implementation: 2022
Crypto yuan is one of the most anticipated digital national currencies in the world, which may become a competitor to the US dollar.
In May 2020, rumors emerged that China would accelerate its development due to the pandemic and US sanctions. In August 2020, a test version of the China Construction Bank Wallet appeared, in which users were divided into four categories. With the help of the wallet, you could pay, redeem, transfer money, as well as top up credit cards. Test versions were only available for a few days. It is known that one could use national crypto currency in the absence of online access. The largest taxi and food delivery operators joined the testing. A full launch is expected during the Beijing Olympic Games in 2022.
In March 2021, it became known that the Chinese state blockchain platform BSN is integrating Free TON into its platform as part of a large-scale integration of dozens of other blockchains. Under the terms of the agreement, TON Labs will provide PRC developers with access to the TON protocol, which will allow them to create applications on Free TON in accordance with the requirements of the Chinese regulators. To-date, BSN has entered into agreements with Polkadot, Oazis and Bityuan, in February 2021 it included Cosmos. The digital yuan will also be added to the “Internet of Blockchains”.
2nd place Digital Dollar (US)
Start of implementation: August 2020
Final implementation: No Data
The digital dollar emerged as a response to statements about the digital yuan, and is associated with the Fed’s desire to maintain the status of the dollar as the world’s reserve currency. The US government cannot yet reliably predict how the issuance of the digital currency will affect both the US and global economies. Also, senators are concerned about the fact that in the event of financial crises, people will turn to paper money. As in other countries of the world, the tokenization of money was chosen as the basis of the digital dollar. The latter is not meant to replace physical cash, but it should become a third form of money. The Federal Reserve will continue to control monetary policy so far. Almost all of the world’s digital money is planned to work according to this scheme.
3rd place Digital Euro
Start of implementation: May 2020
Final implementation: No Data
The first tests of the digital euro took place in May 2020 together with the Central Bank of France.
The Banque de France (Bank of France) applied blockchain technology developed in-house to create digital securities representing the euro. Investment bank Societe Generale also took part in the tests. The digital euro is mainly aimed at the creation of a secure alternative means of payment. They also talk about its social function, or its use in times of disasters and pandemics, when the usual money may be unavailable or lost by their owners.
4th place Digital Won
Launch: July 2020
Phase: Testing and Pilot Use
Final Implementation: No Data
In July 2020, some categories of people affected by COVID-19 received benefits in South Korea in digital won, amounting to 100,000 won. Today, a number of provinces issue their own digital money and pay social benefits with it. Applications have been developed and POS terminals are in operation to pay for goods and services, which, in addition to standard payment cards, accept local digital money.
5th place Digital Ruble
Start of implementation: December 2020
Final implementation: No Data
It is planned that the digital ruble will become available to all economic entities, such as citizens, business, financial market participants, and the state. Until December 2020, the Central Bank collected implementation updates from experts. Like non-cash money, the digital ruble will be created for settlements and online payments. It is reported that it can be used even when there is no Internet access. An interesting fact: the Central Bank report states that interest cannot be charged on the digital ruble. The Central Bank also notes that the digital ruble will help increase the availability of financial services for the population of Russia’s remote regions, and avoid the risk of redistributing funds into foreign digital currencies.
Buy Cheap MTN, Glo, 9Mobile, Airtel Data VTU Services, Check out the best offers for you Today