- Malaysian Central Bank has currently done and dusted a proof-of-concept for a CBDC in collaboration with three other countries.
- Malaysia has joined the bandwagon of a growing cadre of countries, all of those exploring the value of development and research as a central bank digital currency.
- It is done considering that the own cross-border payment system can be established using blockchain technology.
Malaysian Central Bank has currently done and dusted a proof-of-concept for a CBDC in collaboration with three other countries. It is done considering that the own cross-border payment system can be established using blockchain technology.
Malaysia has joined the bandwagon of a growing cadre of countries, all of those exploring the value of development and research as a central bank digital currency, also known as the CBDC. The Bank Negara Malaysia is the central bank, and it has declared to Bloomberg on 17th January that the decision has been taken, but the path to move forward with the digital currency has not yet been performed. Therefore, the main focus will be on the central bank’s digital currency with the proof of concept experimentation enhancing the policy and technical capabilities of the bank.
It also mentioned that such massive research was to make sure that the cbdc program was ready for the launch and no issues shall arrive in the future.
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In 2021, the Malaysian government joined hands with southeast Asian neighbors Singapore, Australia, and South Africa to create the proof of concept CBDC pilot. It is extensively known as the project Dunbar, and the joint announcement has declared the details.
In the project Dunbar, there has been a utilization of the quorum and Corda chain platforms which have been done to demonstrate the blockchain-based cross-border remittance capability. It is noticeable that the demonstration was done about how blockchain technology could remove the need for third parties and save a lot of time and cost for the transactions. There are numerous Nations out there that are researching for the CBDC program, and it would be best to operate under their jurisdiction.
Who is next after Malaysia?
As far as China is concerned, it is the largest nation that has executed the central bank digital currency pilot program. There is a mobile application created specifically for this purpose, and it has gained 20 million downloads since 4th January. China is also planning to initiate the, and it will allow the international visitors to gain access to digital Yuan. Those visitors will have to show their passports during the winter Olympics held in Beijing.
The eastern Caribbean Central Bank also initiated rolling out the finalized Central Bank digital currency called the EC dollar, and it started in March 2021. When it was the month of December 2021, only Antigua was the final among the eight jurisdictions that did not adopt this currency. Shortly after, Jamaica started planning on launching its own Central Bank digital currency in 2022. Is following the successful pilot program, which they finished about two weeks ago.
Also, a new report from the EY is that the banks need to overcome their uncertainties regarding the digital assets and prepare for CBDC and stablecoins issues. Ernst and Young have given recommendations that the bank should be changing its regulatory dimensions. It will help address the upcoming association of state-supported Central Bank digital currencies and private stablecoins.
The global regulatory outlook of 2022 has brought forward the need for a regulatory change. Most financial service firms do not have any uncertainties in mind even after digital assets and Cryptocurrency come to the mainstream. The report says that the customers will be able to keep the money with the central bank, and there is absolutely no need for retail banks. Poems will be able to see precipitous interest rate margins and have no cause of concern.