Home Which countries have launched their MNBCs and those who are working on them?

Which countries have launched their MNBCs and those who are working on them?

Cryptos

7 min read

Cryptocurrencies and blockchain have invaded many sectors of activity. Today, cryptocurrencies are so present in our daily lives that thinking of going back is impossible. In any case, this is what the SEC decreed in September 2022.

More and more countries are legislating on cryptocurrencies, and others are making them legal tender, on par with state currency. This is notably the case in El Salvador . Recently, the Central African Republic went even further by creating the first digital currency: the Sango Coin.

What is the current situation in countries? Who are those currently working on developing their own MNBCs? Which countries are currently working on it?

This is what we will see in this article.

What are central bank digital currencies (CBDCs)?

Even if the term is less used in French, we can use the acronym MNBC for "Monnaie Digitale de Banque Centrale". Very often, the preferred term is the English equivalent, the acronym CBDC which means "Central Bank Digital Currency". We therefore speak of MNBC to refer to currencies created digitally by the central banks of countries.

Unlike the fiat currencies we know today, MNBCs are entirely digital currencies, created electronically.

Why do countries want to have digital currencies?

The idea of creating MNBCs was imputed by cryptocurrencies like Bitcoin. However, with MNBCs, we will remove two fundamental elements of Bitcoin, namely its non-regulation and its decentralization. Thus, MNBCs are cryptocurrencies in technical terms but remain fundamentally state currencies. They are then "centralized" and controlled by central banks.

Money has always evolved over time. Men in society used shells, salt, stones before using the coins and notes that we use today. However, in recent years, currencies have been made electronic with the use of computers. Our societies are gradually eliminating cash due to an increasingly digital use of money.

For practical reasons, cryptocurrencies have an ideal form for the digitalized society that we know. It is perfectly suited to our uses and it was designed for and by IT. It is therefore entirely logical that our banknotes and coins will become entirely digital in the (near) future.

Countries where CBDCs have been launched:

The Central African Republic: Sango Coin

The Central African Republic has made Bitcoin legal tender alongside the CFA franc . However, in April 2022, the country announced the launch of its own digital currency: the Sango cryptocurrency . This has generated considerable controversy—given the current political situation in the country—and the project has sparked as much enthusiasm as it has detractors. The Central African Republic aims to digitize the entire country's infrastructure, including finance, justice, and administration.

Read the article to find out how to invest in sango coin.
View video to understand Sango coin.

The Bahamas

The Central Bank of the Bahamas launched its own currency in October 2020. It was the first country in the world to launch a MNBC in the world. In the Bahamas, approximately 20% of the population does not have access to banking services. This is then an opportunity to improve the country's financial inclusion.

Nigeria: e-Naira

Nigeria is one of the top 3 countries that use cryptocurrencies the most in the world. It is also part of the countries with the largest percentage of population to own cryptocurrencies. Despite a population that is very open and interested in bitcoin and cryptocurrencies, the government does not exactly share the same enthusiasm. The country fears ever-increasing capital flight.

However, Nigeria launched its CBDC in October 2021. It is the e-Naira. Nigerians can then pay in stores and pay for state services with this currency. For 219 million inhabitants, only 1 million downloads of the wallet were made. This remains low but this is also explained by the fact that the project is still very recent (barely a year old). Likewise, not everyone has a smartphone, an essential element for using eNaira.

–> ? There is now a service to send and receive bitcoin with a cell phone: Machankura.

Eastern Caribbean Monetary Union

The Eastern Caribbean Union involves seven countries: Antigua and Barbuda, Dominica, Grenada, Montserrat, Saint Kitts and Nevis, Saint Lucia and Saint Vincent and the Grenadines.

The Union has launched its own MNBC to also accelerate financial inclusion. Note that Antiguilla Island was the only country in the Union to have withdrawn. Thus, within the union, the DCash currency is the official currency.

The interesting point is that users can use it without the need for a bank account. All they need is a smartphone and the linked app.

Which countries are testing MNBCs in pilot projects?

Sweden: e-krona

Sweden was perhaps one of the first countries to declare that it was considering establishing its own MNBC. The country has been working on the e-krona project for several years. However, the country fears that older people will struggle in a cashless society.

China and the e-CNY (Digital Yuan)

China was the first major country to have actively worked on its digital currency, since April 2020. The creation of the digital Yuan is part of a more global strategy by China to reduce the use of other cryptocurrencies.

Jamaica

In 2022, Jamaican Prime Minister Andrew Holness declared that Jamaica would launch its MNBC following a successful pilot test. Here again, MNBC will facilitate transactions within the country. This would reduce the cost of banking which is very high for the Jamaican population.

In which countries are MNBCs being developed?

United States

The United States is clearly the country with the most advanced cryptocurrency projects. Indeed, it has one of the largest populations of cryptocurrency holders. Furthermore, many high- market-capitalization crypto companies are registered in the US. Numerous websites and platforms are based in the US, making it a true crypto hub.

One example is initiatives like CityCoin, which is currently operating in Miami with the Miami Coin . It's a local-scale project where cryptocurrencies are used by citizens and the municipality.

The country is considering creating its own MNBC as well but some experts believe that development should take a few years. What seems to interest the USA more in creating its own cryptocurrency is the tax reason. This would prevent capital flight and a loss of related taxes.

India and the digital rupee

The Indian population is heavily invested in cryptocurrencies and has many blockchain engineers and developers.

The digital road is expected to launch by 2023, according to government announcements. The Central Bank of India (CBOI) will be backed by the Reserve Bank of India and will digitize the country's financial infrastructure. For a country that conducts extensive foreign currency transactions, this would present an opportunity to reduce costs. Iran has also decided to use cryptocurrencies for its commercial transactions with this same objective in mind.

The European Union via the European Central Bank (ECB)

The ECB has announced on several occasions that it is considering creating a digital version of the Euro. Christine Lagarde, then president of the ECB, announced that this could be beneficial for all European citizens. However, there is reluctance regarding the rise of cryptocurrencies.

There are many parameters to take into account that are not obvious. For example, there are countries in the European Union that do not use the euro. This risks making it more difficult to implement than to find a common agreement.

A bill will be discussed by the European Commission from 2023.

Final word on Digital Currencies in the world and their progress

We relied on data from the Atlantic Council , which regularly updates the state of CBDCs worldwide. Currently, more than 105 countries are exploring digital currencies. Together, this represents 95% of global GDP. This illustrates the potential impact on the global economy and financial infrastructure. Furthermore, the BRICS countries recently announced their intention to create their own digital currency.

This could prove to be a tremendous springboard for many poor and emerging countries. Indeed, these same countries would stand to gain the most. Cryptocurrencies have different uses depending on the financial situation of the country in question. Many analysts believe that cryptocurrency could improve financial inclusion . Cryptocurrencies offer access to financial services to populations previously excluded.

Read our article on the difference in cryptocurrency usage between rich and "poor" countries. For example, Argentinians tend to use Bitcoin more as a hedge against inflation . In Europe, it remains primarily a speculative asset. This explains, for instance, why remote villages in El Salvador , such as El Zonte, use Bitcoin as their primary currency.

(You can consult the Global Finance report which lists the most underbanked countries in the world).

Note: No financial advice is given in this or any other article on this blog. This is information of which you are the sole judge and master. Be responsible with your investments and only invest as much as you are willing to lose.

-----

Our affiliate links:

To buy cryptocurrencies (in a simple way) :