The list of central banks that have initiated or have already developed plans to issue a digital currency continues to grow. According to the latest research, at least 18 central banks have publicly acknowledged the development and/or launch of their own digital currency.
Central bank adoption: The latest updates
The People’s Bank of China (PBoC), the nation’s central bank, has announced that the development work around its digital currency is almost complete. In a statement released this week, the PBoC stated that the “processes of top-level design, setting industry standards, developing potential functions and integration testing,” are “almost complete”.
The PBoC initiated the process of developing a state-controlled digital currency and established the Research Institute of Digital Currency in 2014. The media outlets reported that Facebook’s plans for its own digital currency project have made the PBoC speed up its plans of completing the infrastructure around the nation’s digital currency.
Accordingly, the Chinese digital currency has major technical features such as the ability to process transactions offline on mobile phones.
Similarly, the new Governor of the European Central Bank (ECB), Christine Lagarde, wants the bank to take a more active approach in the development of the central bank digital currency.
“ECB will continue to assess the costs and benefits of issuing a central bank digital currency that would ensure that the general public remains able to use central bank money even if the use of physical cash eventually declines.”
“We are working on all aspects of CBDC, with in-depth analysis of costs and benefits of such a new form of central bank money. It will take a while before we will communicate on our conclusions.”
Even in her previous role, as the head of the International Monetary Fund (IMF), Lagard was advocating for an “open approach” towards digital currencies.
Will increasing adoption lead towards higher prices?
Many analysts believe that the increased adoption for cryptocurrencies will take bitcoin to another level. Recent surveys note a surge in crypto adoption. The Yougov report shows that 36% said cryptocurrencies would be widely accepted for legal purchases, which is an increase compared to previous numbers.
According to Mike McGlone, senior commodity strategist for Bloomberg Intelligence, Bitcoin should move higher in 2020 on increased adoption and fixed supply.
“Bitcoin is winning the adoption race, notably as a store-of-value in an environment that favors independent quasi-currencies. In 2020, Bitcoin supply should increase about 2.5%, an all-time low on the way to zero growth.”
Whether Bitcoin moves higher this year remains to be seen. However, the surge in worldwide adoption of Bitcoin and cryptocurrencies can only help Bitcoin prices. Furthermore, the adoption of cryptocurrencies as a means of payment from the side of central banks will provide a major boost to Bitcoin’s price, according to many analysts.
Bitcoin currently trades at $8060, which is more than double compared to the same time last year, when it traded around the $3600 mark.