Cryptogram

DIGITAL CURRENCY ADOPTION BY GOVERNMENTS

As of 2016, over 24 countries are investing in distributed ledger technologies (DLT) with $1.4bn in investments. In addition, over 90 central banks are engaged in DLT discussions, including implications of a central bank issued digital currency.

Canada

The Bank of Canada have explored the possibility of creating a version of its currency on the blockchain.

The Bank of Canada teamed up with the nation’s five largest banks — and the blockchain consulting firm R3 — for what was known as Project Jasper. In a simulation run in 2016, the central bank issued CAD-Coins onto a blockchain similar Ethereum. The banks used the CAD-Coins to exchange money the way they do at the end of each day to settle their master accounts.

China

A deputy governor at the central bank of China, Fan Yifei, wrote that “the conditions are ripe for digital currencies, which can reduce operating costs, increase efficiency and enable a wide range of new applications.”. According to Fan Yifei, the best way to take advantage of the situation is for central banks to take the lead, both in supervising private digital currencies and in developing digital legal tender of their own.

Denmark

The Danish government proposed getting rid of the obligation for selected retailers to accept payment in cash, moving the country closer to a "cashless" economy. The Danish Chamber of Commerce is backing the move. Nearly a third of the Danish population uses MobilePay, a smartphone application for transferring money.

Netherlands

The Dutch central bank is experimenting with a bitcoin-based virtual currency called “DNBCoin”.

Russia

Government-controlled Sberbank of Russia owns Yandex.Money - electronic payment service and digital currency of the same name.

South Korea

South Korea plans national digital currency using a Blockchain. The chairman of South Korea’s Financial Services Commission (FSC), Yim Jong-yong, announced that his department will “Lay the systemic groundwork for the spread of digital currency.”

Switzerland

In 2016, a city government first accepted digital currency in payment of city fees. Zug, Switzerland added bitcoin as a means of paying small amounts, up to SFr 200, in a test and an attempt to advance Zug as a region that is advancing future technologies. In order to reduce risk, Zug immediately converts any bitcoin received into the Swiss currency.

Swiss Federal Railways, government-owned railway company of Switzerland, sells bitcoins at its ticket machines.

United Kingdom

The Chief Scientific Adviser to the UK government advised his Prime Minister and Parliament to consider using a blockchain-based digital currency.

The chief economist of Bank of England, the central bank of the United Kingdom, proposed abolition of paper currency. The Bank has also taken an interest in bitcoin. In 2016 it has embarked on a multi-year research programme to explore the implications of a central bank issued digital currency. The Bank of England has produced several research papers on the topic. One suggests that the economic benefits of issuing a digital currency on a distributed ledger could add as much as 3 percent to a country’s economic output. The Bank said that it wanted the next version of the bank’s basic software infrastructure to be compatible with distributed ledgers.

Ukraine

The National Bank of Ukraine is considering a creation of its own issuance/turnover/servicing system for a blockchain-based national cryptocurrency. The regulator also announced that blockchain could be a part of a the national project called "Cashless Economy".

Nigeria

A former Deputy Director of the CBN and senior lecturer with the Department of Economics, University of Lagos, Dr Emmanuel Balogun  explained that e-payments have come to replace the traditional fiat money.

“In a  country like ours which is fully reliant on hard currencies, the e-payment money would be of a significant advantage to the CBN. It is not that CBN is just going into it, it is already a policy. The technology is based on what we call Real Time Gross Settlement (RTGS). This time around, you have direct access to your account irrespective of your bank and where it  is located and that is why you can draw from your ATM card anytime and anywhere in the world. That’s what we are talking about" Balogun said.