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The Green Sheet Online Edition

February 28, 2022 • Issue 22:02:02

Readers Speak: The CBDC race is on

We wish to thank Briana Marbury, executive director of the Interledger Foundation, https://interledger.org, for sending us the following perspective:

"The Winter Olympic Games in Beijing are currently taking place, and athletic talent is not the only competition being showcased. Alongside the Olympians who have gathered from around the world to compete in physical displays of strength, China is flexing its own proverbial muscle in the global economy. In a move that overtakes the United States and Europe, China released the digital yuan to the public, making it the first economic superpower to issue a central bank digital currency (CBDC).

"Creatively rolling out the digital yuan at the games by providing athletes ski gloves and smartwatches with built-in digital payment functions, China is hoping to gain an advantage over their measured competitors who have been sluggish to move forward with their own CBDCs.

"Conveniently (for them), the digital yuan is also one of only three forms of payment accepted in the Olympic Village. Strong-arming aside, this is an impressive display of a large government body showing its willingness to embrace innovation. However, the initial uptake of the digital yuan has been slow due to stringent COVID-19 restrictions imposed on Olympic visitors and privacy concerns highlighted by government representatives from the West.

"As the major superpowers in the world contemplate the best way to introduce a CBDC into their economy while simultaneously maintaining stability, the Chinese government has bet that the fastest across the finish line wins the race. In the United States specifically, with the exception of a few outliers, many government officials have been more focused on regulating the emerging payments space in a time when collaboration and understanding are needed. There is a fine line between reflection and research, and paralysis. If we don't transition from analyzing to actually implementing—even if it's a small pilot—the United States is guaranteed to lose the race by forfeit."

CBDC implementation

What's the best way for countries to introduce CBDCs efficiently and safely? How soon do you envision this happening on a wide scale? Will consumers embrace them? Let us know at greensheet@greensheet.com. end of article

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