The unstoppable rise of the CBDCs
In its number one international bestseller Sapiens: a brief history of humanityDr. Yuval Noah Harari observes that people all over the world who do not believe in the same god or obey the same king are more than willing to use the same money.
As Dr Harari points out, historically speaking, silver did not require any technological breakthrough. It was and remains an entirely psychological revolution. Money and its value are, as Harari described it, “an intersubjective reality that only exists in the imagination shared by people.”
It is not the dollar or the yuan per se, nor the inherent chemical structure of a banknote or coin that gives monetary value. For example, across Africa and the Asia-Pacific, cowries have been imbued with a rating of value for almost 4,000 years, and the cowrie sign stood for money in ancient Chinese words.
And while many of us immediately associate money with “paper,” Australia issued the world’s first polymer banknote developed by the Reserve Bank and the Commonwealth of Nations Scientific and Industrial Research Organization ( CSIRO) in 1988. By 2003 Romania, Australia and New Zealand had completely converted to polymer banknotes.
Money is whatever we are collectively willing to use as the basis for a systematic and consistent exchange of goods and services – and as a temporary store of perceived wealth. And money is arguably the most critical element in the functioning of our complex, highly evolved social systems: a trust imperative like no other.
Trust is key, especially considering that money is in fact fiat currency issued by a central bank, and only around 10% of the world’s money supply is represented in recognizable banknotes or coins in circulation. – in the United States, this figure is 11%. according to the Federal Reserve. The remaining 90%? Ones and zeros on the hard drives of financial institution servers around the world.
Despite the fact that physical money is largely absent from the global economy today, central banks around the world have been reluctant to convert physical banknotes into digital coins – even in the face of the growing adoption of crypto. volatile and unsupported by government currencies by consumers and demand. policy makers for central bank programmable and stable value digital currencies, or CBDCs.
But that is about to change when the flame is lit for the Beijing Winter Olympics and China officially quits its four-year CBDC trial and fully launches its digital currency, the e-yuan. Countries like Australia, which until recently resisted the idea of a retail CBDC, are now reconsidering their position in response.
Indeed, our initial analysis of key economies in the APAC region indicates that central banks are actively grappling with different political motivations, consumer behaviors, and industry readiness – even a ban on certain forms of cryptocurrency on grounds. religious. The landscape pictured below (click to enlarge) is varied, but China is leading the way in demonstrating what is possible with a CBDC.