Central bank digital currencies are touted by central banks as the solution to the world’s monetary problems, but they are poorly taken up by populations.
As the world’s debt-based monetary system struggles to keep going, the central planners are trying to lay the foundations for a planet-wide roll out of central bank digital currencies.
The Bank of International Settlements (BIS), the central bank of central banks, has published an edict that obliges all central banks to issue a CBDC within the next 2 to 3 years.
However, as many countries are developing their CBDCs, some countries have already implemented them, and it appears that they haven’t been particularly successful so far, except in the case of China, where a piloting phase is still in operation.
e-Naira, JAM-DEX, and DCash
The Nigerian iteration of a CBDC is called the e-Naira, and it’s been in circulation since October of 2021. According to Tech Monitor, only 200,000 transactions of the e-Naira, worth around $9.5 million, have been recorded.
As of May this year only 80 retail merchants had signed up to use the e-Naira, while downloads of the app had only been made by a mere 0.25% of the population.
In the Caribbean it was a similar story. The Jamaican JAM-DEX and DCash were issued in the Eastern Caribbean, though only 3.4% of Jamaicans downloaded the Lynk app for the JAM-DEX, and only 1.72% downloaded the app for DCash.
Problems so far have included onboarding merchants, which the Tech Monitor article described as “embarrassingly difficult”. Also, DCash went offline for two months after the certificate for the network that hosts it expired.
Crypto vs CBDCs in India
India is the fourth largest adopter of cryptocurrencies worldwide. Perhaps this is due to a heavy use of remittances in the country. This particular market was valued at $100 billion this year by the World Bank.
However, be that as it may, the Indian government has cracked down heavily on the crypto industry, imposing a 30% tax on crypto trading, and even trying to ban it outright, although this was overturned by India’s Supreme court.
It has been posited that CBDCs could theoretically make faster remittance payments, but then that still leaves the not so small matter of Indian citizens completely losing their monetary independence with CBDCs.
Bitcoin is a way out
Crypto may have gone through the mill over the last few months with all the turmoil from collapsing centralised exchanges, but Bitcoin is still there, and still provides a door out of a future where citizens are beholden to the central bank to be able to spend their money.
It could be that CBDCs might not be successful, or citizens could outright refuse to use them. If this should happen, then Bitcoin will be waiting patiently in the wings to provide a sovereign form of real money that holders can spend when and to who they like.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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