Smaller countries like Eswatini and Ghana are leading global CBDC development efforts and their progress has lessons for the rest of the world according to Wolfram Seidemann, CEO at Giesecke + Devrient Currency Technology (G+D).
“We’re seeing that CBDC implementation is being powered by countries with comparatively less developed financial infrastructure and/or fewer competitive consumer choices.
These countries are eager to innovate and benefit from convenience, security and cost effectiveness, providing well-developed nations with pioneering learnings to take their own bold steps towards digital public money.” – CEO, Giesecke + Devrient
G+D offers its expertise in public currency technology, cryptology, smart cards, and digital and mobile payments to central banks and financial institutions engaged in research and implementation of Central Bank Digital Currencies (CBDCs).
In addition, G+D Filia is a solution designed to aid central banks in effectively managing and operating their national Central Bank Digital Currencies (CBDCs), while ensuring compliance with security and resilience standards.
G + D is the German company implementing the CBDCs for Eswatini and Ghana. While Ghana’s CBDC has been in the headlines, little is known about Eswatini’s CBDC, which is called the Digital Lilangeni.
“We’re seeing that #CBDC implementation is being powered by countries with comparatively less developed financial infrastructure and/or fewer competitive consumer choices."
– CEO, Giesecke+Devrienthttps://t.co/kd64c0PvnI @GieseckeNews pic.twitter.com/fErH7L7ya7
— BitKE (@BitcoinKE) August 30, 2023
Eswatini’s Central bank recently published its initial Digital Lilangeni Design Paper following the first phase of a CBDC Diagnostic Study conducted in 2020. From the study, it was revealed that a retail CBDC presented the best opportunity for the adoption of a digital currency in the small South African nation.
The design paper sets out the design characteristics of a potential retail CBDC in the country, and similar to Ghana’s CBDC, the aim is to achieve a diverse CBDC ecosystem.
According to Seidemann, the concluded study includes insights to understand how a CBDC can provide additional benefits and ensure continued access to central bank money contributing to the development of its resilient payment system.
Seidemann highlights that there will be a multitude of applications for Central Bank Digital Currencies (CBDCs) in the future contributing to the reinforcement of financial systems. The widespread adoption of CBDCs will create opportunities for various automated payment scenarios. For instance, programmable features could enable government direct-to-person payments, and programmable wallets integrated into electric cars could automate payments at charging stations.
Nonetheless, he notes that the absence of standardized regulations could potentially hinder the widespread adoption of Central Bank Digital Currencies (CBDCs), and the journey toward establishing CBDCs as a universally accepted digital currency is likely to be a complex and gradual process.
“A lot of people ask ‘what problems does a CBDC solve?’ But today, I would like to invite you to take a different perspective and rather ask the question ‘what opportunities can a CBDC bring?’
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