Countries Creating Digital Decentralized Currencies

Digital Citizenship
March 10, 2020

Countries Creating Digital Decentralized Currencies

Countries including China and Sweden are researching how to develop their own decentralized currencies.

Key Insight

Countries including China and Sweden are researching how to develop their own decentralized currencies.

Why It Matters

The global monetary system is currently based on state-backed fiat currency.

Examples

In 2018, the Marshall Islands created a new digital currency called the Sovereign (SOV), which is now legal tender in the micronesian nation. Singapore’s Central Bank created a digital currency backed by the Singapore dollar that runs on the Ethereum blockchain. Canada’s Central Bank has been researching a central bank digital currency, or CBDC, and China is working on its own blockchain-based digital currency. What’s Next One of the hot topics at the 2020 annual World Economic Forum in Davos, Switzerland was the rise of central bank digital currencies (CBDCs). At the close of the conference, WEF published a policy-maker toolkit designed to help central banks investigate CBDCs, which “could potentially be used as a tool to achieve policy objectives such as improved safety and resilience in payments systems; increased efficiency, access and competitiveness of payments systems; better data transmission and reporting to central banks; and financial inclusion.”

The Impact

According to a report from the Bank of International Settlements, 80% of the 63 central banks surveyed are researching whether and when to release their own digital currencies.

Watchlist

Bank of International Settlements, central banks worldwide, the World Economic Forum.