According to a new Bison Trails report, about 80% of central banks are exploring use cases for government cryptocurrencies, and 40% are already testing proofs of concept.
Bison Trails analysts examined proof of concept for government cryptocurrencies launched in over 11 countries and cities, including Hong Kong, Thailand, China, Australia, Singapore and Japan. The report also explores the role of “private” digital currencies, such as Facebook’s Diem project.
According to the report, the concept of a government cryptocurrency is growing in popularity and approaching global adoption, and the digital currency infrastructure is critical to a successful rollout. Central banks around the world – from Sweden to South Africa – are developing government cryptocurrencies.
Diem’s upcoming stable cryptocurrency, formerly known as Libra, is motivating many central banks to develop the concept of a state-owned cryptocurrency, according to the report. Recently it became known that the Diem project will return to the US jurisdiction and launch a stablecoin jointly with Silvergate.
“Diem offers a completely new paradigm in economics: a diverse pool of businesses and stakeholders that influence society, developing digital currencies in an open source, managed chain built using the most advanced technologies – with an embedded global market and limited barriers to growth.” the report says.
According to analysts, the development of Diem has become a “catalyst” for the Chinese government, which has accelerated the implementation of its plans to issue digital currency by the People’s Bank of China. China is close to launching the digital yuan and is already testing government cryptocurrency with commercial institutions and the public.
“The Chinese government remains committed to becoming a central player in the emerging global digital currency market,” Bison Trails researchers note.
The US Federal Reserve is taking a more cautious approach to issuing government cryptocurrencies. Recently, US Federal Reserve Chairman Jerome Powell said China’s efforts to develop the digital yuan will not push the United States into a race to release a government cryptocurrency.
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