By Alicia Maher
Over the last couple of years, many nations have researched the benefits of national digital currencies and how they can develop theirs. While a few are almost completing their CBDCs’ development, some have gone far in creating their CBDC, but others are just starting at the research level.
The Research Phase Might Take Up To A Year
The North American nation, Canada, belongs to the last category of countries. Today, Canadian authorities officially announced that it’s partnering with the foremost research institute (MIT) to create its national digital currency. Highlights of the announcement from Canada reveal that MIT’s research for Canada CBDC will last for one year. Part of MIT’s research will primarily focus on the benefits of the emerging blockchain tech and its benefits for Canada’s CBDC development.
The announcement also indicated that the research could form the basis for crypto development to have an improved Canada CBDC. But the bank quickly clarified that it has not yet decided whether to develop a national digital currency yet as it will only make a decision based on the research results. The bank further specified that it would be working with MIT’s DCI team, a subdivision of the MIT research team.
Collaborating With Many Nations
This MIT-Canada bank collaboration is not the first for MIT. MIT has partnered with several other nations regarding developing a national digital currency. MIT is also in a partnership with Boston’s fed reserve over creating a CBDC.
Following the conclusion of this research phase, MIT’s report to Boston contained two aspects of developing its CBDC. The first was through parallel transactions, while the second was through DLT.
Even though most authorities have favored the establishment of national digital currencies over legalizing private digital assets such as BTC, many crypto players have condemned the actions of leaders trying to establish a CBDC.
One of crypto asset management firms, Asset Strategies’ top-level executive, Edward Snowden, opined that privacy and security could not be guaranteed with CBDCs. The recent executive order by US President Joe Biden contained provisions for developing a CBDC. Part of the order also tasked the treasury department to collect enough details about the crypto market. The president also mandated the attorney general critique financial policies and suggested ways these policies can be amended to include crypto and CBDC after it has been created.
China’s CBDC Progress
One of the key proponents of China’s CBDC (Yao Qian) has suggested the need for Chinese authorities to facilitate the use of Web3 technology. Qian made the call via a recently published academic journal detailing the importance of this new technology to the future of China’s internet system.
He explained that the Web3 technology would enhance user autonomy, especially data privacy. The revered academician was the first head of research for China’s CBDC development. After leaving his role there, he was appointed as the head of China’s science and technology regulatory agency. Qian had also stated the need for Chinese authorities to establish fair tax rules for crypto players.