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Despite the massive interest from central banks for CBDCs, nearly 70% of the projects are running only pilot programs and are far away from an actual launch.

The Bahamas and Cambodia are the leading countries in a ranking listed by PwC while the biggest economy in Asia – China lines up third.

CBDCs Are Not Here Yet

Central bank digital currencies (CBDCs) have been a hot topic in the past few years. A paper released by the Bank of International Settlements last year informed that at least 80% of such organizations were working on launching a digital version of their respective fiat currency.

However, it turns out that the majority are still far away from releasing an end-product. A recent PwC report cited by Bloomberg showed that 70% are in pilot stages only.

On the other hand, roughly 23% of retail projects have reached the implementation stage.

According to the research, more than 88% of CBDC projects at the pilot or production phase use blockchain as the underlying technology. This is because it allows for secure transfer of ownership, transparent audit trails, and increasing interoperability with different digital assets.

PwC further asserted that interbank or wholesale applications are more common for advanced economies while retail projects are operational in emerging countries.

The multinational professional services network of firms operating under the PwC brand emphasized the future importance of CBDCs for the financial sector:

”CBDC will contribute significantly to the modernization of the international monetary landscape, hand-in-hand with reconfiguration in both payment and financial infrastructure. They will generate numerous opportunities for further digitization in both corporates and financial institutions, as their integration in payment and financial infrastructure progresses.”

China Ranks Behind The Bahamas and Cambodia

The PwC report placed The Bahamas and Cambodia on the top of a ranking exploring the maturity of central banks’ digital currency projects. This is due to the fact that their projects are already live.

The design in The Bahamas came by the name of the Sand Dollar and was launched on October, 20th 2020. The project in the Asian country is called Bakong and arrived shortly after.

China is typically considered the most advanced nation in designing its CBDC, but the country is yet to officially release the digital yuan. The People’s Bank of China has conducted numerous tests in many regions. Furthermore, the government plans to expand the trials with foreign visitors at the 2022 Beijing Winter Olympics, according to CNBC.

A central bank official stated that there is a possibility athletes and tourists from abroad could use the Chinese digital currency during the event:

”For the upcoming Beijing Winter Olympics, we were trying to make e-CNY available not only to domestic users but also to international athletes and like visitors.”

Source

As plans to launch central bank digital currencies (CBDCs) across different countries are still ongoing, Her Majesty’s Treasury and the Bank of England have jointly launched a task force to explore the feasibility of creating a CBDC.

According to an official press release on April 19, the BoE is yet to decide on whether to issue a CBDC and that is why the task force was created—to explore its use cases, associated risks, and determine the suitable design.

The task force would work with both local and international agencies to ensure the outworking of the project.

The bank also announced that it has created a CBDC Engagement Forum, which would cater to the non-tech aspect of the CBDC, and a CBDC Technology Forum, which would oversee the technical aspect of digital currency creation.

Once the project is approved, the UK’s digital currency would serve as a complement to other existing payment methods, not a replacement.

A CBDC would be a new form of digital money issued by the Bank of England and for use by households and businesses. It would exist alongside cash and bank deposits, rather than replacing them, the bank stated.

The Taskforce is also aiming to monitor the CBDC development projects of several other foreign countries “to ensure the UK remains at the forefront of global innovation on digital currencies.”

Currently, China is at the forefront of CBDC development, intending to create a digital yuan that could help improve financial systems in the country, curtail the threat of cryptocurrencies, and accelerate cross-border payments. 

Several economies exploring the possibility of launching a CBDC are paying close attention to China’s digital yuan project, hoping to get a few pointers from there to enable them to do things right.

Speaking of doing things right, a few weeks ago, ECB’s president, Christine Largade, noted that the bank is taking its time to ensure that every step is carried out to a T, adding that it might take another four years before it rolls out a CBDC.

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Yesterday’s price crash does not seem to have affected bitcoin’s medium-term trend. 

After three consecutive weeks of prices consistently above $55,000, yesterday it plunged from around $60,000 to below $53,000 in a matter of minutes, only to recover shortly thereafter. 

Within an hour it was back down to $55,000 and then slowly climbed back up over the course of the day to $57,000. 

Santiment pointed out that at the very moment of the sudden and rapid collapse, the social networks exploded with “buy the dip” and “bought the dip” comments. 

The crowd appears to be confident that #Bitcoin‘s dip to $53.3k earlier today was nothing more than a small bump in the road. Our data indicates #buythedip mentions peaked on the small correction, while #boughtthedip peaked on the major one Sunday. https://t.co/Vz2FYd3hke pic.twitter.com/PCtfkWcbe8

— Santiment (@santimentfeed) April 18, 2021

Moreover, the peak of the ‘buy the dip’ posts occurred before the real crash started, i.e. when the price had just begun to fall, while the peak of the ‘bought the dip’ posts occurred just before the price fell below $53,000. 

According to Santiment, this data suggests that people remain confident in Bitcoin, and that yesterday’s drop was “just a little bump in the road”.

If this is the case, then it would seem that yesterday’s drop was not able to make a real dent in bitcoin’s trend. 

The trend of Bitcoin’s hashrate

Another parameter that seems to be heading in the same direction is hashrate. 

In fact, on April 16th there were some incidents in China that forced several mining farms to suspend operations, suddenly cutting as much as 35 exahash.

The graph of the Bitcoin hashrate clearly shows that on the following day, April 17th, there was a real collapse, because from 157 Ehash/s two days earlier it had fallen to 105, a drop of 33% in just two days. 

Yesterday, this parameter had already risen to 110 Ehash/s, while today it is already back above 130 Ehash/s. 

The problem has mainly been reflected in Bitcoin’s block time, which has jumped to 15 minutes from the usual 10 minutes. Yesterday, however, it had already fallen below 12 minutes, though today it seems to be particularly high again. 

This data clearly shows that there has been a problem over the last few days, but it seems to be on the way to being solved. However, we will probably have to wait until May before there is a new change in the difficulty that could solve the problem for good. It is possible that this will be one of the largest reductions in difficulty in percentage terms in recent years. 

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