10 Countries With Central Banks Developing Cryptocurrencies

According to Atlantic Council, eighty-one countries have shown interest in central bank digital currencies. 7 countries have launched their own, 16 are in the pilot phase and 40 are researching on the topic. At this rate, many nations will adopt cryptocurrencies in the coming decades.

This article gives a list of the top 10 countries which have developed central bank digital currencies. These countries are pioneers and are leading a new wave in the world.

What Is Central Bank Digital Currency

A central bank can issue a virtual form of a country’s fiat currency which is backed by the government. This currency is called a central bank digital currency, informally called CBDCs. It is a digital token of fiat currency.

A CBDC is centralized and according to critics, doesn’t maintain the privacy of citizens. However, it simplifies monetary policies and improves financial inclusion.

Countries with Central Bank Digital Currency

• The Bahamas

Central bank: Central Bank of The Bahamas

Cryptocurrency: Sand Dollar

Stage of development: Launched

The Bahamas launched its own CBDC, the Sand Dollar, in December 2019. The Sand Dollar is the world’s first-ever national digital currency. The digital currency is pegged to the Bahamian Dollar.

The Sand Dollar was launched with the intent of promoting financial inclusion and reducing cash-induced costs.

During the Covid-19 pandemic, digital payments helped remove queues from banks which slowed the spread of the virus.

• Eastern Caribbean Countries Union

Central bank: Eastern Caribbean Bank

Cryptocurrency: DCash

Stage of development: Launched

The ECCU is the sub-regional body of the Eastern Caribbean which has eight member states. In March 2021, the union’s central bank announced the digital currency launch in a tweet:

https://twitter.com/DCash_EC/status/1371920957082845191?t=TQShaUnFuENWtPtz6dvQFg&s=19

DCash has gone live in four of its member states, namely:

• Antigua and Barbuda
• St Kitts and Nevis
• Saint Lucia
• Grenada

It is the world’s first central bank digital currency in a currency and was developed by Bitt Partners.

DCash would act as a legal tender between ECCU’s member states, facilitating easier cross-border transactions between them.

• Nigeria

Central bank: Central Bank of Nigeria

Cryptocurrency: eNaira

Stage of development: Launched

The eNaira launched on October 25th and around 500 million eNaira ($1.21 million) was minted on the day of the launch. Reuters tweeted: “Nigeria launched the eNaira on Monday, becoming the first African nation to launch a digital currency”. The developer of the digital currency is Bitt Inc, the company behind ECCB’s DCash.

The eNaira is an alternative for decentralized cryptos like Bitcoin which are difficult to regulate and are exploited in cybercrime, a social problem in the country.

Nigeria is a leading market for cryptocurrencies and ranks sixth on charts for cryptocurrency adoption. The eNaira would make finance easier for unbanked citizens which would spur wealth creation.

• China

Central bank: People’s Bank of China

Cryptocurrency: e-CNY

State of development: Pilot

China began researching the prospects of a CBDC in 2014. It began the pilot phase of the e-CNY in April 2020 and is expected to launch fully in 2022.

The e-CNY or digital yuan is expected to be used to retail payments in China. The Chinese government has stated that the e-CNY has the potential of competing with other digital currencies like bitcoin and Ethereum.

e-CNY has the largest pilot launch in the world. If the digital currency becomes successful, it could spur other countries into investing more in CBDC development.

• Japan

Central bank: Bank of Japan

Cryptocurrency: Unnamed

Stage of development: Research

The Bank of Japan has announced intentions to issue a digital currency but currently, it is still in the research phase. The plans will enter the second phase in April next year.

Though there is no digital currency in existence, it is predicted that it could have a significant impact on private payment services because the central bank has said it would co-exist with these services.

• Sweden

Central bank: The Riksbank

Cryptocurrency: e-krona

Stage of development: Research

Sweden is one of the major economies in the world that has shown interest in developing its own CBDC. In September 2021, the e-krona moved from the simulation phase to the testing phase. The Riksbank partnered with commercial bank Handelsbanken to test the e-krona in real-world situations.

Sweden and China are the only major economies that have begun testing CBDCs.

• The Marshall Islands

Central bank: Nil

Cryptocurrency: SOV

Stage of development: Launched

With a population of 58,000 people, the use of physical cash on the island is becoming increasingly cost-intensive. The country has no central bank and most of its citizens do not have a bank account.

The Sovereign (SOV) was passed into law as a legal tender in 2018. But unlike other cryptocurrencies, SOV is actual money like dollars and euros, just in virtual form.

• Jamaica

Central bank: Bank of Jamaica

Cryptocurrency: Unnamed

Stage of development: Launched

The country launched its digital currency on August 9, 2021. The Bank of Jamaica minted 230 million Jamaican dollars ($1.5 million) for its initial pilot phase. The digital currency was developed by the Irish fintech company currency Mint.

The central bank issued the CBDC to promote financial inclusion in the country.

• El Salvador

Central bank: Central Reserve Bank of El Salvador

Cryptocurrency: Bitcoin

Stage of development: Adopted

El Salvador made headlines when it adopted bitcoin as its legal tender in September 2021. The Central American country is the first to make such a bold move and it surprised many. Though this is not a usual central bank development currency, the implications are high. The country set the bar in national cryptocurrency adoption for other countries to follow.

• European Union

Central bank: European Central Bank

Cryptocurrency: e-euro

Stage of development: Research

The EU is worth a mention in the drive for CBDCs development. The institution has started research on a digital euro but there are no conclusive decisions yet. There are still debates on the risk of such an endeavour but this has not stopped the EU from seeing the potential.

Mobile, contactless payments have become part of our daily lives. QR codes, USSD banking, and mobile app banking are now normal daily routines and now, more than ever, the world is at our fingertips.

Central banks are joining the efforts too. Central bank digital currencies offer unique advantages like safety and convenience, and in our rapidly growing world, it gives us fluidity. CBDCs promise much more and only the coming years will reveal the true extent of its potential.