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Summary
  • In a survey by the “central bank for central banks” (Bank of International Settlements), 80% of central banks were working on a digital currency in some capacity and 20% expected to issue a general-purpose one in the next 6 years.
  • Of the major economies, China is by far the closest to implementing a central bank digital currency (CBDC). After 5+ years, the Digital Currency/Electronic Payments (DCEP) – also known as the ”digital yuan” – is expected to be in circulation by the end of 2020.
  • While the near-term impact of central bank digital currencies may not be noticeable to the average consumer, the long-term vision is of near-instant, cheap payments around the world, opening up the global marketplace.
  • The advent of currencies like the digital yuan and Facebook-backed Libra pose a nascent but existential threat to the US’ ability to wield power on the global political stage through the US dollar – from sanctions to counter-terrorism to US dollar-denominated trade.
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