By 2030, between three and five countries will make the transition to replace their currency with the digital currency issued by the central banks (CBDC). This conclusion is made in the report of the German analytical centre on financial technologies.
The document also contains a notion that if the European Central Bank does not increase its efforts to develop the CBDC, the digital yuan will overtake it, and this will not undermine the state of the dollar.
European Analytical Centre, specializing in research in the field of financial technology and blockchain, dGen, has published research on the potential effect of CBDC.
Having studied the history of the presently used fiat money, namely the US dollar, the Euro and the Chinese yuan, the analytical centre emphasized, that the next logical step in their evolution will be their transformation into digital currencies.
Not indicative of specific countries, researchers predict that within the next ten years, three countries will completely replace their fiat currencies with CBDC. At the same time, dGen has highlighted several countries that are actively promoting the issue of digital currency.
In this process, China is one of the leaders, since the most densely populated country of the world is approaching the launch of its DPEC (digital currency) and is already testing it in different spheres – transport, banking sector, online shopping, delivery of food and ready meals.
The Swedish CBDC is also close to release, as the European country initiated a digital crown test at the start of 2020. By 2025, the country plans to abandon cash, and the electronic crown will help in achieving this goal.
The German Analytical Centre believes that the Eurozone is falling behind other regions. This opinion was recently confirmed by the President of the European Central Bank, Christine Lagarde.
Within her comments, she declared that CBDC can work in retail or wholesale channels, and the digital euro will supplement, but not remove the current currency.
The dGen report predicts that if the EU does in fact develop and launch its CBDC, it will have “the opportunity to act as an effective method of payments in international trade, that is not dictated by the currency war between China and the USA”.
If the ECB fails to introduce a digital euro by 2025, the Chinese yuan will overtake it. With this, the digital dollar (the thought of which is only floating in the air) will remain the most famous fiat currency. Moreover, he can strengthen his position, as the developing and small countries may “consider the opportunity to move on to the digital dollar.”
