The implementation of digital currency will be the biggest change to our financial system in over 50 years.
Central banks all around the world are in the process is developing, piloting and issuing their own digital currencies, most commonly referred to as Central Bank Digital Currency.
This is a worldwide initiative, scheduled to go live over the next few years.
How Dangerous are CBDCs?
While almost every country in the world with a central bank is moving towards CBDCs, little thought has been given to the dangers this new Digital Cash brings to society.
Most recently, Nigeria has restricted ATM Withdrawals to $45/day to force the adoption of their CBDCs and China has revealed that their CBDCs come with an expiry date.
This article details five important reasons we should be concerned with the implementation of Digital Cash by Central Banks.
Richard Knight
Recent International News on CBDCs:
Digital Yen (Pilot) to Launch in April
February 20th, 2023
Japan will start a pilot program in April to test the use of a digital yen, its central bank said on Friday, joining a growing number of countries seeking to catch up with front-runner China in launching a central bank digital currency (CBDC).
£20,000 Limit for Holding Digital Pounds
February 12th, 2023
The UK will likely impose a limit of £10,000 to £20,000 per individual for holding their new digital currency once it comes into existence, a Bank of England official said.
The Bank of England has officially launched its digital pound CBDC project as a “new form of money,” for households and businesses. An official consultation paper distributed by the Bank of England and HM Treasury outlines the new project and the various facets of the digital pound.
UK Government focuses on Digital Pound CBDC
January 12th, 2023
The UK government has finally broken its silence around the Digital Pound CBDC. This week seeing Conservative MP Andrew Griffith provided an update on plans to introduce a digital pound, with plans for a consultation in the coming weeks.
Griffith clarified in Parliament that the UK’s consultation into Central Bank Digital Currencies (CBDCs) will look into how the digital currency will operate in wholesale retail, with assistance from the Bank of England.
India Proposes Crypto Ban - But Wants CBDCs
January 3rd, 2023
The RBI governor was speaking at the BFSI Insight Summit 2022 and reiterated his views on banning cryptocurrency. He said that he still holds the view that cryptocurrencies should be banned as they have no underlying value and poses risks to financial stability.
Titled the Cryptocurrency and Regulation of Official Digital Currency Bill, the legislation seeks to ban the trade and use of private cryptocurrencies in the country, paving the way for the government to issue a Central Bank Digital Currency (CBDC).
Basel Committee Approves International Crypto Banking
December 17th, 2022
The Basel Committee on Banking Supervision (BCBS) of the Bank of International Settlement has approved its global crypto banking regulations. These regulations are expected to go into effect on the 1st of January 2025. The approval is contained in a 36-page publication released by the (BCBS).
The Basel Committee on Banking Supervision (BCBS), which sets the majority of international standards for prudential regulation of banks, also serves as a common platform for collaboration on banking supervisory issues. Its 45 members include bank supervisors and central banks from 28 different countries.
Sweden's Riksbank to Launch e-Krona Soon
December 16th, 2022
Sweden’s central bank has announced that its ‘e-krona’ digital currency project will now move to the next stage of development. The bank is believed to be working alongside a range of other international central banks in order to work out how the institutions can respond to the demand for a centralized digital currency.
Digital Euro Will Be European Target In 2024
December 15th, 2022
The Presidents of the European Parliament, Council, and Commission have signed a joint agreement establishing goals for the next European election in 2024, which includes a reference to the central bank digital currency (CBDC).
The European Commission intends to submit legislation for a digital euro in the second quarter of 2023. The design process will complete in March 2023, followed by a decision on whether to adopt a euro-denominated CBDC anticipated for October.
According to ECB officials, a digital euro will most likely have restricted individual transactions and a limited store of value.
China Reveals CBDC With Expiry Date: Forcing People to Spend it or Lose it
December 10th, 2022
The world’s second-largest economy China has been one of the leading countries in introducing a central bank digital currency (CBDC) and as part of this plan, the Chinese government has indicated their CBDCs come with an expiry date.
As per the latest reports, China’s native CBDC (The Digital Yuan) will come with an expiry date. This means that the users of the Digital Yuan will be forced to spend in a certain timeframe without the option of saving or using it to build wealth.
Nigeria Restricts ATM Withdrawals $45/day to Force CBDC use
December 6th, 2022
The country of Nigeria has just banned ATM cash withdrawals over $225/week to force the use of CBDCs. The Central Bank of Nigeria issues a director to financial business in a December 6th circular, stating that both individuals and businesses would now be limited to withdrawals of $45 and $225 per week (respectively) from ATMs.
Individuals and businesses will also be limited to withdrawing $225 and $1,125 per week (respectively) with a 5% fee for individuals and 10% fee for businesses for amounts above those limits.
The maximum cash withdrawal via point-of-sale terminals is also capped at $45 per day.
According to CBDC tracker, Nigeria is one of 11 countries to have fully deployed a CBDC and 15 other countries which have launched pilot programs.
India's e-Rupee CBDC Pilot Now Live
December 1st, 2022
Pilot CBDC of India's new e-Rupee went live on December 1st. After launching Central Bank Digital Currency (CBDC) for the wholesale segment, the Reserve Bank of India (RBI) has now announced its availability for retail users starting December 1.
The pilot will be implemented among a small group of customers and merchants, starting with the four cities of Mumbai, New Delhi, Bengaluru and Bhubaneswar.
Both the wholesale and retail pilots are now live in India. The RBI has joined 17 other central banks including those of China and South Korea whose pilots are underway.
NY Fed launches CBDC pilot program
November 15th, 2022
The Federal Reserve Bank of New York’s Innovation Center announced that it would be launching a 12-week proof-of-concept pilot for a central bank digital currency (CBDC).
This 12-week CBDC pilot program with major banks will include many large banks such as BNY Mellon, Citi, U.S. Bank and Wells Fargo. As part of the program, they will be issuing tokens and settling transactions through simulated central bank reserves as part of the pilot.