The People’s Bank of China （PBoC） and the National Bank of Kazakhstan （NBK） have formed a partnership to collaborate on central bank digital currency （CBDC） research. This agreement highlights the growing global interest in CBDCs and aims to enhance the development and implementation of digital currencies in both countries.
Points
- China and Kazakhstan form a partnership for CBDC research.
- Collaboration aims to enhance CBDC development and implementation.
- The partnership involves joint research projects and skill enhancement for employees.
- Potential benefits include faster, more secure cross-border transactions.
- The agreement underscores the importance of international cooperation in financial innovation.
The People’s Bank of China （PBoC） and the National Bank of Kazakhstan （NBK） have entered into a partnership to share expertise and conduct joint research on central bank digital currencies （CBDCs）. This collaboration is a testament to the increasing global focus on CBDCs as countries explore the potential benefits of digital currencies.
Under this agreement, the two central banks will share their knowledge and practices in CBDC development and implementation, conduct joint research projects, and enhance the skills and competencies of employees involved in CBDC research and development.
The development of a CBDC could facilitate faster, more secure, and cost-effective cross-border transactions, crucial for international trade and economic integration. Observers note that a China-Kazakhstan co-development of CBDCs can potentially lead to increased economic efficiency, reduced transaction costs, and improved financial inclusion.
The partnership between China and Kazakhstan is expected to evolve significantly. Kazakhstan, which has been an observer in the CBDC project, may formally signal its intention to become a core participant following the completion of the joint research.
The Global Race for CBDCs
Countries worldwide are accelerating their efforts to adopt CBDCs to enhance financial inclusion, improve payment efficiency, and reduce reliance on the U.S. dollar. However, the adoption of these digital currencies faces stiff competition from established digital payment platforms like Paytm and Google Pay, which are widely popular among users.
In Indonesia, the central bank launched Project Garuda in 2022, aiming to introduce a digital e-rupiah. This initiative is designed to enhance financial inclusion and facilitate cross-border payments, positioning Indonesia as a forward-thinking player in the digital currency landscape.
In Sweden, the central bank, Riksbank, has been running a pilot for its e-krona CBDC since 2020, aiming to ensure the continued provision of a state-backed payment method in an increasingly digital world. Meanwhile, the U.K is exploring the potential launch of a CBDC, with the Bank of England and HM Treasury focusing on complementing cash and bank deposits.
解説
- The partnership between China and Kazakhstan highlights the strategic importance of international collaboration in the development of CBDCs.
- Joint research and skill enhancement initiatives aim to leverage the strengths of both countries in advancing digital currency technology.
- The global push for CBDCs reflects the need for modernizing financial systems, improving transaction efficiency, and ensuring financial inclusion.
- Despite the competition from established digital payment platforms, CBDCs offer a state-backed alternative that could enhance trust and security in digital transactions.
- The experiences of other countries like Indonesia, Sweden, and the U.K. provide valuable insights into the diverse approaches and benefits of implementing CBDCs.