China’s initial CBDC trials captured the attention of the world’s central bankers. Now, they’re planning on going global.
China’s Blockchain Service Network (BSN) laid out its plans for 2021 on Jan. 15. The company expects to build a universal digital payment network (UPDN) over the course of five years. However, its goals for 2021 include launching a beta-test version of the UPDN in the second half of the year.
Besides the UPDN, BSN has three other primary goals for 2021. These include expanding the BSN network and overall ecosystem as well as promoting the non-CBDC private platform.
What is BSN?
Blockchain Service Network is a Chinese government-supported blockchain research and development company. It is responsible for developing and rolling out the extensive blockchain platforms serving as a digital backbone for the country. With over 34,000 blockchain companies currently working in China, the country’s use of the technology extends deep into its economic base.
BSN’s plans take part in the Chinese government’s rollout of the digital yuan. The introduction of the digital yuan was a event in the CBDC sector. It eclipsed by far the efforts of the European Central Bank in both scale and scope.
While the ECB experimented with payments in France in 2H2020, the Chinese airdropped digital yuan, engaged citizens in contests to win the CBDC, launched P2P transfers and enabled retailers to accept it.
Do BSN’s plans pose a threat to other countries? They do say that they foresee expanding Public City Nodes for their blockchains in 50 cities, “covering most developed countries” and well-growing developing countries. This is a BSN blockchain network development goal, not a CBDC goal.
However, the ECB broadcast its fears of foreign digital intervention on the currency markets. In November, 2020, the ECB laid out its “Reinvention of Money” strategy. One reason for the introduction of the digital euro, ECB Executive Board member Fabio Panetta declared, was the introduction of foreign CDBCs and the possible threat to Europe’s currency sovereignty.
Meanwhile, in America
On Thursday, Jan. 14,Chair of the US Federal Reserve Jerome Powell stated during an interview on Yahoo Finance that the development of a US CBDC is not something to do in a hurry. Also, he sees the US as having a first-mover advantage in that the dollar is the world’s reserve currency.
Powell stated that it would take years for a US CBDC, not months. That said, he also pointed out that it is something that needs to be done, and done right.