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EU Central Bank Digital Currency For B2B Moves Ahead, Consumer Version Slows
The Euro area’s central banks are gearing up to introduce new plans for a wholesale central bank digital currency (CBDC) soon.
The main aim is to revolutionize how financial institutions manage securities and foreign exchange transactions.
The progress is more rapid than the controversial plan to launch a digital euro for ordinary citizens, which has sparked debates over privacy and the implications for commercial banks.
This new venture will explore the use of tokenized CBDC, a type of digital currency issued by the central bank.
The details of eligibility criteria and interest will be made public in the coming weeks.
There will also be real transaction trials throughout the next year.
This move allows central banks to maintain control over the money supply, which is crucial for managing inflation and financial stability.
The central bank plans to explore “alternative protocols and blockchains” along with its proprietary Distributed Ledger for Securities Settlement System (DL3S).
A recent study has suggested that financial markets powered by such technology could save $100 billion annually by automating back-office processes and freeing collateral.
However, the idea of a digital euro for the everyday consumer is progressing at a slower pace due to legal and political challenges.
Recently, a group of cross-party EU lawmakers requested the European Central Bank to delay decisions on such a digital currency until they can agree on new legal constraints. Read more here.
US Dollar going digital? Not so fast, says Congress.
Australian Central Bank’s legal and technical roadblocks despite finding CBDC advantages.
CBDC rollouts threaten freedom and privacy.
Traditional finance takes on crypto, the clash of old vs new in finance.
Crypto stablecoins allowed in Japan.
CBDCs: A leap into the future or privacy nightmare?
Insights From EU’s Digital Currency Evolution For Next-Gen Cryptos Like Zucoins
The EU’s central banks are gearing up for a new era with the imminent unveiling of their wholesale central bank digital currency (CBDC).
This development can serve as a beacon for emerging crypto projects like Zucoins.
Delaying the everyday consumer end of the central bank digital currency is great news for up-and-coming crypto projects as it leaves more of the digital token market open to normal, business competition.
Even so, an eventual decision that is central to one country or region wouldn’t likely spell disaster anyway—these are centralized approaches, but cryptos systems, blockchains or Splitchain, aim to be global and decentralized.
They serve a different purpose and aren’t limited by borders.
It’s been one of Bitcoin’s strong points. It moves around to favorable regions in the world.
So long as one of the 195+ countries in the world hasn’t blocked it, it survives.
Besides, even the IMF announced that attempting to block digital commodity crypto products like Bitcoin is pointless.
Great news for Zucoins. One of their many development goals has carefully mirrored this digital commodity quality of Bitcoin.
Exploring alternative protocols and blockchains forms a major part of the EU’s CBDC model.
This presents a valuable lesson for next-generation crypto networks, inspiring them to evolve and adapt to these emerging technologies.
Fortunately, for Splitchain, the limitations of traditional blockchain systems have been well understood by the Zucoins’ Research And Development Team for many, many years—hence the reason why a ground-up rethink was needed for Splitchain’s goals.
Other off-the-shelf solutions simply didn’t—and still don’t, exist.
Splitchain’s current technology, a base, layer 1 network protocol solution that caches results from transactions completed by peers, sidesteps the need for competitive mining, staking validator pools or centrally governing bodies to authorize changes.
This design aligns with the EU’s focus on alternative protocols.
Perhaps it’s something one of Zucoins’ European users could investigate and research ways into that opportunity.
A recent study highlighted the potential for blockchain technology to save $100 billion annually by automating back-end processes and liberating collateral.
This is just in the EU too.
Expanding this globally, it’s an eye-opening figure.
Solving inefficiencies in traditional transaction systems that operate all over the place, across major international regions, would be a major improvement in how settlements occur.
One of Splitchain’s development goals has been to focus on this problem, plus numerous others, taking the form of a permissionless network protocol that is globally accessible.
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All the best,
Peter & Rob
MyZucoins
Disclaimer: Of course, this is not advice, financial or otherwise. It’s also important to consider the risks and challenges associated with any potential benefits.