Strategic Partnership for CBDC Research
A comprehensive partnership to collaborate on the issues of Central Bank Digital Currencies (CBDCs) between China and Kazakhstan has taken place. The project is aimed at improving the culture of sharing, expertise, and competence of the employees through joint training and research initiatives.
Enhancing Knowledge and Expertise
The partnership between the People’s Bank of China (PBoC) and the National Bank of Kazakhstan (NBK) serves as solid evidence of the global interest in CBDCs. According to the memorandum of understanding signed by the two central banks, China and Kazakhstan will share their knowledge and expertise both in the fields of CBDCs and their implementation. This new form of cooperation will be developed by means of carrying out joint research projects and fostering the professional skills and the competencies of the employees working in the field of CBDC research and development.
Facilitating Cross-Border Transactions
What’s more, it is possible that CBDC development will improve international economic transactions, by making them faster, safer, and cheaper. It has been argued that China-Kazakhstan joint development of CBDCs could lead to increased economic output, decreased transaction costs, and financial exclusion alleviation.
Future Prospects
Interestingly, in the future, the China-Kazakhstan partnership is projected to undergo major changes. In the same vein, the observer status of Kazakhstan might be switched to official participation after the project is completed and the research findings are positive.
Now Installing of CBDC in the World
The countries all over the world are now finalizing their efforts to adopt CBDCs so as to amplify financial inclusion, efficiency of payment, and to some extent decrease the dependence on the U.S. dollar. Nevertheless, the establishment of these digital currencies has been a fierce battle with the traditional digital payment platforms like Paytm as well as with Google Pay staving that digital methods of payment are the most wanted among users all over the world.
India’s CBDC Initiative
The Reserve Bank of India, has already piloted a project of the wholesale CBDC and e-rupee-W is the name and financial institutions are the beneficiaries. Moreover, The maintenance of the entire bank system has become rather a heavy issue. With a view to solving that, some central banks, for example, the central banks of the City of Inner Mongolia and Shan, as well as a few banks of the United Arab Emirates were seen to pump around 25% of their reserves into e-RMB. After that, the economy started picking up.
Indonesia’s Digital E-Rupiah
The Bank of Indonesia drives Project Garuda, in 2022, which is the e-Rupiah digital currency program. This innovative scheme is aimed at ascertaining that digital currencies are a widespread financial instrument that facilitates the participation of people. The emergent effects are that there is an improvement in poverty reduction.
Thailand’s CBDC Pilot
The Bank of Thailand is running a scenario of a trial program with digital banknotes called Retail Central Bank Digital Currency (CBDC-R) during 2020. Undoubtedly, it is the serious pilot that focuses on better financial inclusion and payment functionality, signifying Thailand’s attempt to bring digital technology into banking.
Global Developments
More than that, other countries have improved the adoption of CBDC noticeably. On this point, the Bahamas released the world’s first CBDC, the Sand Dollar, in 2020, and the adoption rate was higher, 15% of its population being users. nevertheless, the Eastern Caribbean Central Bank has, amongst others, introduced DCash in 2021 which now it is used in eight Caribbean countries to promote cross-border payments.
Sweden is in the process of creating a virtual CB of its own, the e-krona, and the central bank, Riksbank, has been testing it since 2020. Its goal is to give people a state-backed electronic money option besides the already electronic methods. As for U.K the process of creating a new ghost comes in its line, it is in the initial exploratory phase, the Bank of England and HM Treasury are primarily working on the offering that aims at the cash and bank deposits as their complementary basis of the CBDC.
The European Union – the digital currency is seen as a panacea to the issues of cross-border payments – “Digital euro” is a concept that EU is lately exploring along with the Central Bank. With the European Parliament saying that the feasibility of the project is yet to be ascertained and the potential harm of the digital euro is a great concern. “Cautiously, we advise, ‘Wait until the inquiry is over but get ready”, they added, in a letter to all members’.
