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Ukraine and Sweden are the most mature European markets when it comes to digital currencies supported by central banks – globally as the future of money and the more credible alternative to well-known cryptocurrencies such as Bitcoin.
The stellar growth of Bitcoin, Ethereum and other cryptocurrencies has endangered the global financial structure – helped with a devaluing, cash-backed dollar. At the risk of losing control of a sea of private – and unregulated – digital currencies, as many as 60 central banks globally are developing their own digital tokens with ‘official’ status.
Two types of central bank-backed digital currencies are on the way: consumer and business currencies (so-called retail currencies); and currencies for transactions between banks (known as digital wholesale currencies).
In a new report, experts from PwC produced a first-class benchmark for retail-focused digital currencies, which download the central bank’s websites and other sources such as the Atlantic Council, the press and Google’s trends to gain insight into the different currencies available and the maturity of these coins.
From this analysis came an interesting result: Europe’s most advanced digital currencies are not found in the largest economies in the United Kingdom, Germany or France, but in Ukraine and Sweden, which are famous for how their government – supported cryptocurrencies make their mark. among consumers and in the economy.
Ukraine’s “E-hryvnia” is Europe’s most mature digital currency. The coin was launched by the Bank of Ukraine in September 2018 and was piloted in December of the same year with almost 5,500 tokens.
“The project included a test of distributed ledgers, the formulation of a provisional framework and regulations, the establishment of a temporary accounting model and studies of various aspects from the impact on macroeconomic stability to the legal position of CBDC publishing and circulation,” explained Pauline Adam Kalfon, a partner at PwC and one of the authors of the report.
The technology proved to be more than sufficient to support a scaled distribution, and the government is currently working on a “technically feasible” nationwide launch that would not destabilize the financial system.
Ranked second in Europe, and eight worldwide according to PwC: Sveriges Riksbank has been researching a potential “e-krona” since 2019 and is based on an already strong base for digital financing. Less than 10% of payments in the country are made in cash, and six of the country’s banks have run a common digital payment app – Swish – since 2012.
“In December 2019, the Riksbank tested e-wallets, distributed ledger technology and interoperability levels between participating banks. After this, the Riksbank proposed that the Riksdag, the Swedish Parliament, should examine the concept of legal tender in order to give the central bank more control over money, ”explained Benoit Sureau, a partner at PwC and an expert in blockchain.
The e-krona was tested in 2020 and ongoing feasibility studies are expected to be completed by the end of 2022. The Riksbank called on the global professional service company Accenture in January 2020 to help design the consumer-oriented functions in the proposed e-krona. “So far, Sweden has provided the highest level of technical insight into its digital currency project,” says Sureau.
Other countries ranked among the top 10 in the digital currency report are – in order – the Bahamas, Cambodia, China, Uruguay, Ecuador, the Eastern Caribbean, South Korea and Turkey.
According to the study, developing economies dominate the central bank – supported digital currency landscape due to the financial inclusion that comes with the new currencies. “The public will be one of the largest recipients of digital coins as it gives them access to a digital form of central bank money for the first time. And it is a major milestone in monetary development, ”explained PwC partner and global crypto leader Henri Arslanian.
“Digital bank currencies with digital currencies are direct alternative solutions for further efforts for financial integration by public authorities. As sovereign digital cash, they can help modernize the current monetary system but also help bridge the gap with the unbanked, Adam-Kalfon concluded.
At the wholesale level, the coin’s are led by Thailand, Hong Kong, Singapore, Canada, the United Kingdom, France, South Africa, Europe, the United Arab Emirates and Japan.