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Christine Lagarde’s Announcement Comes Amid China Advancing On Their DC/EP Digital Yuan

At least 80 central banks around the world are looking at CBDC adoption, according to Christine Lagarde, the head of the European Central Bank (ECB).

“We think that it’s a duty of us to actually have available digital currencies that would operate to the benefit of consumers. So, what would it look like? Well, it could be used like banknotes. I don’t think it is like banknotes, because it will not have the degree of anonymity that banknotes have.,” the head of the ECB noted in a press conference.

According to Lagarde, both customers and central banks want privacy to be safeguarded, but when it comes to anonymity, central banks around the world expressed concerns.

However, commercial banks disagreed with the possibility of central banks having direct control over the distribution of funds, as nowadays central banks issue money to commercial banks, while banks distribute it to the general public.

Most likely CBDCs would run on a bank-issued wallet app, rather than go the route of self-custody, leaving cryptocurrencies within the banking system.

However, the concerns about banks handling CBDCs for customers can be addressed by allowing self-custodian wallets to be incorporated with their own bank-chain to the bank-chain network utilizing Simple Payment Verification (SPV) wallets.

China, for example, already pushed its bank-issued wallet in several provinces. More than $40 million were airdropped to citizens in red envelopes containing digital yuan. The Chinese government is currently concentrating powers on five main cities, with regional development priorities in mind.

The “Red Envelope” promotional campaign is gaining traction, as the amount of money transferred to Chinese residents in digital RMB red envelopes has surpassed 269 million yuan, or roughly $41.5 million, according to Tuoluo Research.

China is also focusing on region-based DC/EP development. For example, the digital RMB program in Beijing, which launched a lottery to distribute 40 million digital yuan ($6.3 million), is primarily centered on the 2021 Winter Olympic Games.

The Shenzhen, Suzhou, Beijing, Chengdu, and Shanghai provinces are all making promotional campaigns, with Chengdu distributing 40 million digital yuan (nearly $6 million) thus far. China’s industrial and financial center, Shenzhen, distributed over 60 million yuan ($9 million) in digital RMB red envelopes. Over 30,000 merchants in the city began updating to the digital yuan’s payment capabilities and requirements.

Airdrop central banks china currency cryptocurrency news crypto news Banks CBDC

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