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The World Of CBDC Is Brewing

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@erikah
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Bitcoin, Ethereum, Elon Musk, Tesla, Dogecoin, these are the words we're hearing and seeing all day, every day these days. However, the world does not consist only of cryptocurrency, crypto God and his business. There are other things going on, even if we don't like it. One of which is central bank digital currency (CBDC).

Image by Gerd Altmann from Pixabay

G7

This week on February 12, the G7, or Group of Seven, an intergovernmental organization consisting of the United States, Canada, France, Germany, Italy, Japan, and the United Kingdom will meet to discuss strategies for getting out of the global economic crisis caused by the coronavirus pandemic. Among the topics to discuss will be CBDCs and the implementation of digital taxation.

Japanese Finance Minister Taro Aso said on Tuesday he wants finance chiefs from the Group of 7 (G7) industrialised economies to have in-depth discussions over digital currency at an online meeting slated for Friday.

“I think it’s important for us to thrash out [policy measures regarding] digital currency issued by central banks,” Aso told a press conference ahead of talks by the G7 finance ministers and central bank governors. source

China

I see a competition among countries worldwide, that is not going to end anytime soon. China is working hard on rolling out its digital currency called Digital Currency Electronic Payment (DC/EP), or digital yuan. Many are foreseeing China as the first one to roll out the digital currency.

The government had an attempt to motivate citizens to swap the existing and well liked digital payment methods offered by the two Chinese giants, by airdopping some digital currency in the past, but without success. Now they are trying again with a different approach.

10 million yuan ($1.55 million) will be distributed to 50,000 people, each will receive 200 yuan (about $30) and can spend it at designated offline locations or on parts of the e-commerce site JD.com, between February 10 and February 17, during the Lunar New Year holiday.

A similar project has been held in the city of Suzhou, the third largest out of Chinese cities behind Shanghai and Beijing, based on GDP.

I see this measure as lure, you get something for free but there's a string attached, you have to spend it where they tell you, when they tell you. If you don't spend it, it'll be taken away from you. This is what centralization means.

Beijing is preparing for more pilot use of the country’s digital currency during the upcoming Winter Olympics in 2022. source

China is pressured by different factors to be the first in this area and I see them capable of breaking the ice.

Digital yuan will not use blockchain or distributed ledger technology, like cryptocurrencies, because blockchain can not be regulated by authorities.

Hardware Wallet

According to a Feb. 7 announcement by Xiong’an authorities, the Xiong’an branch of the Agricultural Bank of China in Hebei has produced the first hardware wallet designed for the digital yuan. The product was developed by the Party Working Committee of the Xiongan New Area and the People’s Bank of China branch in Shijiazhuang.

According to the announcement, the new hardware wallet supports dual offline payments without an internet connection. The digital yuan wallet also features payments without the use of mobile phones. source

The launch has been carefully planned, so the new hardware wallet for the digital yuan to be available during the upcoming New Year holidays in China, to allow users to send gifts to their family members and friends to express their New Year’s wishes. This is how you trick people.

Furthermore, towards the end of 2020, Huawei announced that the upcoming Mate40 smartphone series will feature an integrated hardware wallet for the digital yuan. Two birds with one stone, sell people a Chinese phone that has incorporated the digital wallet and they will not want another.

A Race Against Time

This is a race against time. China is pressured internally by Alipay and WeCaht, plus Bitcoin, and internationally by SWIFT, as in case of sanctions, the country will be cut off the program. The US is stressed by China's digital currency as it won't operate inside SWIFT (Society for Worldwide Interbank Financial Telecommunication), a network that enables financial institutions worldwide to send and receive information about financial transactions in a secure, standardized and reliable environment, and could undermine the USD dominance in global payment system.

I'm curious about what the G7 are going to decide.

Posted Using LeoFinance Beta