Timeline of Notable Central Bank Digital Currency Events in 2020

  • Although most countries are still not certain whether CBDC is necessary, research of the technology has escalated.
  • China and its digital yuan are leading the race in terms of testing, but The Bahamas were the first country to issue a CBDC (the “Sand Dollar”) beyond a pilot program.
The historic first national bank building at Independence Hall National Park

The historic first national bank building at Independence Hall National Park. Shutterstock

10 January

China Progresses With CBDC Research

In a statement, the People’s Bank of China claimed to have almost completed the “processes of top-level design, setting industry standards, developing potential functions and integration testing” for its CBDC project, the Digital Currency Electronic Payments system. The bank also revealed it had been working on a two-tiered system, which would allow for “controllable” anonymity.

6 Central Banks Form CBDC Use Case Work Group

The banks formed a working group with the Bank of International Settlements to jointly research Central Bank Digital Currencies, and their potential work cases. The banks said in their announcement:

“The group will assess CBDC use cases; economic, functional and technical design choices, including cross-border interoperability; and the sharing of knowledge on emerging technologies. It will closely coordinate with the relevant institutions and forums – in particular, the Financial Stability Board and the Committee on Payments and Market Infrastructures (CPMI).”

21 January
24 January

Japanese Lawmakers Start Work on CBDC Proposal

According to a report, around 70 lawmakers from Japan’s ruling party had begun work on a proposal, which would see the nation issue its own digital currency. In order to keep Japan at the forefront of fintech innovation, developing a CBDC should be a joint effort between the government and the private sector, said the Parliamentary Vice-Minister for Foreign Affairs Norihiro Nakayama.

Study: 80% of Banks Engaged in Some Form of CBDC Work

According to an annual study conducted by the Bank for International Settlements, around 80% of banks are already engaged in some form of CBDC research, while 40% have already moved to experiments and developing proofs of concept. The BIS surveyed 66 banks — 21 of which from developed economies, and 45 from emerging ones — which covered around 75% of the global population, and 90% of global economic output. From these banks, 30% said they had plans to issue some form of digital currency, while 10% stated they were already engaged in developing pilot projects.

24 January
27 January

Cambodia Working on CBDC Project

The director-general of the National Bank of Cambodia, Chea Serey, told a local news outlet, the Phnom Penh Post, the country’s CBDC project could be launched at some point during the current fiscal quarter. While Serey did not give a definite date for when project “Bakong” will be launched, she did say it will be a blockchain-based, peer-to-peer platform with its own specially designed cryptocurrency.

Federal Reserve Looking Into Possible Digital Dollar

During a symposium at the Stanford Graduate School of Business, a member of the Fed’s board of governors, Lael Brainard, revealed that the country’s central bank was already “conducting research and experimentation” on the potential of distributed ledger technologies. During her speech, she said:

“Given the dollar’s important role, it is essential that we remain on the frontier of research and policy development regarding CBDC. Like other central banks, we are conducting research and experimentation related to distributed ledger technologies and their potential use case for digital currencies, including the potential for a CBDC.”

5 February
20 February

Sweden to Trial Digital Krona

According to the country’s central bank, Sveriges Riksbank, the e-krona pilot would be launched as a simulation within the central bank’s closed network — not involving any banks or end-users — and will run as such until February 2021. The CBDC trial was designed by Accenture, an Irish professional services company chosen to develop the pilot project in December 2019, and was based on R3 Corda.

Korea Launches CBDC Pilot Program

The program had the goal of assessing the technical and legal ramifications of replacing fiat cash with a digital equivalent. In its announcement, the bank also made it clear that it remains skeptical of the need of a digital currency in the country, but wished to be prepared for such a move, should there be a shift in “domestic and external conditions”. The bank said:

“The need to issue a CBDC in the near future still remains slim when considering the demand for cash that still exists, the competitive payment service market and high-level financial inclusion, but there is a need to be able to quickly take steps in case market conditions at home and abroad change rapidly.”

6 April
14 April

China Trials Interface for CBDC

One of China’s four state-owned banks, the Agricultural Bank of China, had reportedly started trialing a test interface for the country’s central bank digital currency. According to screenshots, verified by CoinDesk, the bank had already developed a front-end interface of how users could potentially interact with the digital currency. The leaked images also revealed some of the features that might be offered by the digital wallet, such as being able to send and receive payments by touching another user’s device.

China Confirms Tests of CBDC Mobile App

After screenshots of its interface started circulating on social media, the People’s Bank of China decided to confirm it will be testing a mobile application for storing and exchanging digital yuan. The bank emphasized it will conduct internal closed-circuit tests of the app— in the cities of Shenzhen, Suzhou, Xiong’An and Chengdu — and that it will not affect the commercial operations of involved companies.

17 April
11 May

European Central Bank Focuses On Retail CBDC

During his speech at the Consensus 2020 crypto event, Yves Mersch, an executive member of the European Central Bank, said the bank had shifted its focus on researching retail implementation of a CBDC. He further revealed the ECB had already set up a task force to look into the potential of CBDCs, and that it is expected to publish a preliminary report on its findings in the coming weeks.

Bank of France Successfully Tests Digital Euro

The French central bank, Banque de France, announced it had completed the first successful test of a digital euro as part of its ongoing experiments with CBDC. The blockchain-based digital euro was used in settling an issue of digital financial securities carried out by investment bank Societe Generale. While not much more was said about the trial, the central bank did indicate it will be starting more robust testing of the technology.

20 May
20 June

Thailand Working on CBDC Payment System

According to an announcement from the Bank of Thailand, the new prototype payments system would be designed to be integrated with the procurement and financial management system of Siam Cement Group, Thailand’s oldest cement manufacturer. Expected to last for a year, the project also includes a feasibility study on the payments system, and its reliance on CBDC.

China’s Equivalent of Uber to Trial Digital Yuan

In an attempt to accelerate the application of its CBDC, the People’s Bank of China entered into a strategic partnership with DiDi, the country’s equivalent of Uber. The firm had also started forming a task force to design and implement a CBDC trial on its transportation platform. Though no official date had been given for the launch of the digital yuan, the pilot program was the first real application of China’s DC/EP system.

8 July
15 July

China to Test CBDC on Food Delivery Platform

According to people with “direct knowledge of the matter”, the People’s Bank of China had been in talks with Meituan Dianping, a Beijing-based food delivery firm, to trial its DC/EP system. While a partnership was yet to be finalized, Meituan Dianping’s 435 million user food delivery platform provided a good testing ground for the digital yuan.

Thailand Testing CBDC With Large Businesses

A senior figure at the Bank of Thailand confirmed the bank was already using a CBDC for financial transactions with a number of businesses. While it remained unclear which businesses were used for the trial of the digital baht, the official said the CBDC was entering a new development phase, and could soon be used for transactions with the Hong Kong Monetary Authority. Even though the tests were promising, the bank explained it must first complete a comprehensive study before releasing the CBDC for wider use, as it could negatively impact commercial banks.

16 July
20 July

Bank Of Japan Forms New CBDC Research Team

The new CBDC research group took over from a previous group established earlier in the year, and would look into the implications of CBDC. While the Bank of Japan noted it had no plans to issue its own CBDC, it had created the new group due to the increase in demand for cashless payments in the country, and the increased interest in CBDCs from central banks around the world.

Bank of England Building Network for Potential CBDC

According to information obtained by CoinDesk, England’s central bank was working on redesigning the payments network used by U.K. financial institutions, such that it would become forwards compatible with a CBDC.

30 July
14 August

Federal Reserve Partners With MIT on CBDC Research

In order to assess the safety and efficiency of digital currency systems, the Federal Reserve decided to work with researchers from the Massachusetts Institute of Technology on a project to develop and test the potential use cases of CBDC. Fed Governor Lael Brainard stressed that, while a CBDC could bring opportunities to the table, it could also result in privacy issues, illicit activity, and financial instability.

China to Expand CBDC Trials

According to the Wall Street Journal, China’s Ministry of Commerce planned a major expansion of the country’s CBDC trials. The DC/EP was now expected to be trialed in major cities across most-developed regions, including Hebei province, the Yangtze river delta, Guangdong province, and the cities of Beijing, Tianjin, Hong Kong, and Macau. The ministry added that some poorer regions in China’s center and west may also be able to join the trial if they can meet specific requirements.

14 August
21 August

Brazil’s Central Bank Establishes CBDC Study Group

Established by Banco Central do Brasil, the new 12-member intergovernmental CBDC study group would investigate the security risks, economic implications, and societal benefits that could come with the issuance of a digital currency. The team would also propose an issuance model for a potential CBDC, which needed to “improve the current model of commercial transactions between people and even between countries”.

South Korea Starts Techical Phase of CBDC Pilot

Having reportedly completed the first development phase of its CBDC, the Bank of Korea now looked to hire a private company to help with its digital won. While not much details were available for the second phase of the bank’s CBDC pilot, the chosen firm would assist the BoK with building the architecture of the CBDC, which detailed system aspects such as security systems, handling of data, and possible applications.

31 August
9 September

Mastercard Launches CBDC Testing Platform

Payments giant Mastercard released a platform that allowed central banks to test how proposed CBDCs would work in real life. Mastercard’s virtual testing environment was able to simulate the issuance, distribution and exchange of CBDCs between banks and financial service providers. The payments giant called on central banks to make use of the platform to evaluate the effectiveness of their CBDCs’ design, proposed use cases, and interoperability with existing payment methods.

JD.com to Help China’s CBDC Project

According to local media, the People’s Bank of China had reached a strategic cooperation agreement with JD.com to co-develop mobile and blockchain technology platforms for its digital yuan initiative. The firm would work together with the bank to develop on- and off-line functionality for the digital yuan’s wallet, and further promote the new services.

21 September
25 September

Hong Kong Picks ConsenSys for CBDC Project

The Hong Kong Monetary Authority chose Ethereum venture studio ConsenSys to work on the second phase of its Project Inthanon-LionRock, a cross-border CBDC project between the HKMA and the Bank of Thailand. ConsenSys would use its full-stack Ethereum products to test different solutions for the project, alongside consultancy PricewaterhouseCoopers and Forms, a Hong Kong fintech.

Estonia Begins CBDC Research

Estonia’s central bank, Eesti Pank, launched a project to determine if KSI Blockchain, which is already used in the country’s e-government system, can support a CBDC. Technology companies SW7 Group and Guardtime assisted the Estonian bank in not only CBDC research, but also in looking into new payment solutions.

6 October
7 October

China Reveals Results of First Digital Yuan Pilots

The Deputy Governor of the People’s Bank of China, Fan Yi Fei, revealed some statistics around the country’s CBDC trial, which was conducted in three cities around the country. Reportedly, the trial saw more than 3 million transactions being conducted between April and August, with a total value of 1.1 billion RMB (around $162 million), by the citizens of Shenzhen, Suzhou and Xiong’an. China’s central bank had opened 113,300 personal digital wallets, and almost 9,000 corporate wallets during the trial, making the digital yuan the most widely used CBDC in a commercial setting.

China to Hold $1.5M CBDC Giveaway

The People’s Bank of China found a new way to trial its upcoming CBDC, this time through a $1.5 million worth of digital yuan giveaway. The country’s central bank collaborated with the district of Shenzhen, one of the locations where the DC/EP was being tested, to distribute 10 million digital yuan as “red envelopes”, a traditional way to give cash gifts in China, to 50,000 recipients through a lottery. Accepted in over 3,000 merchants in Shenzhen’s Luohu District, the digital yuan was spendable between 12 and 18 October, after which any unused amount was be taken back.

9 October
9 October

7 Central Banks Set Core CBDC Principles

The Bank of International Settlements collaborated with seven other central banks to release a document discussing CBDCs at length. The banks also agreed that, if a nation wishes to proceed with issuing a CBDC, it must first meet the three core criteria set out in the document.

A potential CBDC needs to be able to work alongside cash and other payment types in a flexible and “innovative” payment system, the document argued. It should also support “wider policy objectives” and not harm the monetary and financial stability, while at the same time “promote” innovation and efficiency.

Russia Starts CBDC Public Consultations

While still skeptical of the idea, the Bank of Russia started exploring the possibility of issuing a digital ruble. The bank said it considered it vital to discuss key aspects, advantages, possible risks, stages and timing of a digital ruble project “with the financial sector, the expert community as well as with all stakeholders”.

13 October
16 October

Spain Fast-Tracking Research on CBDC

According to the Bank of Spain’s, at the time, new strategic plan, CBDC researchers would “consider different design proposals” and analyze digital currency’s financial and systemic risks starting that year, and carrying through to the end of 2021.

China Completes CBDC “Giveaway” Trial

China’s $1.5 million digital yuan giveaway completed successfully, with winners spending around 88% of the total prize pool. The trial saw a total of 47,573 lottery winners receive their prizes in the city of Shenzhen, where the pilot was conducted. Official statistics claimed that, a total of 62,788 transactions were conducted by the winners, who were able to spend 8.8 million yuan out of the 10 million allocated to the pilot. The Shenzhen authorities report also claimed that some of the winners were so interested in the project, that they topped their wallets for an additional 901,000 yuan.

18 October
20 October

Central Bank of Bahamas Launches “Sand Dollar” CBDC

The Bahamas became the first country in the world to officially launch a CBDC project beyond a pilot program. The country’s central bank said, in a tweet, that the CBDC had been made available nationwide, and would be issued by the country’s monetary authority. Underserved communities of the Caribbean nation were the primary target of the initiative, which the bank said would reduce financial service delivery costs and boost transactional efficiency. The country is an archipelago with hundreds of islands, placing limits on traditional infrastructure.

Société Générale Picks ConsenSys for CBDC Pilot

Ethereum software firm ConsenSys was once again chosen for a CBDC research project, this time by French bank Société Générale. The firm would work alongside the bank’s digital asset arm, the SG Forge, and would provide its technology and expertise as part of SG’s continued CBDC pilot efforts. SG was one of the eight organizations selected to help the French central bank with its experimental development work on digital euro.

28 October
29 October

Canada’s CBDC Project Moves Past Trial Stage

The chief of Canada’s central bank, Governor Tiff Macklem, confirmed that the country’s national digital currency initiative had progressed past the experimental phase. According to Macklem, the CBDC was now beyond the proof-of-concept stage and closer to being ready for launch, though he stated he didn’t see a need for one “right now”.

Huawei’s Mate 40 Phone to Come With Digital Yuan Wallet

Mate 40 would be the first smartphone to include an integrated hardware wallet for China’s digital yuan. The phones would come with “hardware-level security, controllable anonymous protection, and dual offline transactions”, which would allow its users to make transactions by simply touching their devices, even if there is no internet connection. It remained unclear if the phones produced for other regions would sport the CBDC wallet.

30 October
2 November

Australia Taps ConsenSys for CBDC Research Project

This was the third CBDC research project on which ConsenSys would be working. The Reserve Bank of Australia chose the firm to conduct CBDC research in partnership with the Commonwealth Bank, the National Australia Bank, and financial services company Perpetual. The collaborative project would focus on the development of a Proof-of-Concept for the issuance of a “tokenized form of CBDC”, that could be used by wholesale market participants for tokenized syndicated loans on an Ethereum-based DLT platform.

Lebanon to Launch CBDC in 2021

The governor of Lebanon’s central bank revealed the country was preparing to launch a CBDC sometime in 2021. While the CBDC idea had been thrown around for a while, Lebanon seemed to have accelerated its development efforts earlier that year, when protests brought the country’s financial system to a halt.

10 November
23 November

China to Hold Second CBDC “Lottery” Trial

The People’s Bank of China chose the city of Suzhou as the second testing ground for its digital yuan giveaway trial. Designed to gauge usability of the digital yuan, the trial was similar to the one in Shenzhen in October, but with additional aspects of the technology not activated in Shenzhen, including the digital yuan’s offline feature that allows users to touch smart devices to make transfers.

Swiss Wholesale CBDC Trial Yields Positive Results

According to a press release from the Bank for International Settlements, an under-the-wraps Swiss CBDC trial had yielded positive results. Launched by the Swiss National Bank and the BIS, the project looked into the feasibility of using a wholesale-focused CBDC to settle digital assets, as well as link DLT platforms to existing payment systems. Titled “Project Helvetia”, the trial demonstrated feasibility for both approaches.

3 December
11 December

Sweden Looking Into Potential Transition to CBDC

The finance committee of Riksbank, the country’s central bank, launched a formal review into the potential of transitioning Sweden to the e-krona. The initiative is expected to complete by the end of November 2022. The review was most likely spurred by Riksbank’s, at the time, latest report, titled “Payments in Sweden 2020”, which claimed that the usage of cash in the country had fallen to its lowest level, with only one-tenth of all payments made using cash.

3 E-Commerce Giants Join China’s CBDC Trial

Local news source CLS reported that three major Chinese companies — DiDi, Meituan and Bilibili — would be taking part in the country’s latest CBDC initiative. Winners of the lottery-based trial in the city of Suzhou were now able to spend their digital yuan winnings online via Meituan’s bike-sharing platform, DiDi’s taxi service, and Bilibili’s video-sharing site.

11 December
16 December

Fintech Firm Launches CBDC Development Platform

The new platform would help central banks tackle compliance issues, and safely test their central bank digital currencies. Launched by EMTECH, in partnership with Microsoft, the goal of the “Modern Central Bank Sandbox” was to assist central banks in setting up a digital currency that is interoperable, meaning it can easily be converted to other cryptocurrencies, and is compatible with payment devices and terminals across the world.

Italian Banking Association Testing DLT-Based Digital Euro

The Italian Banking Association, which is comprised of over 700 Italian banking institutions, started experimenting with a digital euro based on distributed ledger technology. The association aimed to examine the technical feasibility of a digital euro and further look at “new value-added services” that would become possible due to the programmable nature of the technology. The CBDC experiment was divided into two parts: one looking at the infrastructure and distribution model; another assessing how programmability could provide use cases that differentiate a CBDC from existing electronic payment systems.

22 December
25 December

Turkey to Begin CBDC Testing in 2021

The country’s chief central banker, Naci Ağbal, told members of parliament that Turkey would begin pilot tests of a CBDC in the second half of 2021. According to Ağbal, the conceptual phase of the CBDC project had already been completed.

Discussion
Related Coverage
PBOC Official Says CBDC Must be Available in All Retail Scenarios
  • The head of China’s central bank digital currency institute said the e-CNY has undergone a major upgrade, and should be made available as an option in all retail scenarios.
  • The PBOC official noted that platforms can integrate the CBDC in the short term using QR codes, and focus on upgrading their payment tools in the long run.
September 4, 2023, 11:31 AM
Office building of the People's Bank of China

Office building of the People’s Bank of China. Flickr

DeSantis Launches Presidential Campaign, Vows to Protect Bitcoin
  • The current governor of Florida, Ron DeSantis, announced he is joining the race for the 47th president of the U.S. during a Twitter Spaces event on Wednesday.
  • During his speech DeSantis declared his support for Bitcoin and the wider crypto space, noting that if Joe Biden is re-elected “they’ll probably end up killing it”.
Russia to Launch Real Consumer CBDC Trials in April
  • Planned for 1 April, the CBDC trial will involve real consumers and real transactions, though they will be limited to a certain number of customers and transfers.
  • The pilot, however, will not be opened to the general public in its first phase, and will only be opened to customers chosen by the 13 participating local banks.