CBDC “battle for position”: Japan stands in line with U.S. standards, South Korea bids for private companies to enter the game

Although announced on the same day to enter the CBDC, but Japan lacks the courage of South Korea lacks technology, Japanese banks face the biggest problem is not to offend the United States, while South Korea is a worry about the technical reserves.

CBDC "battle for position": Japan stands in line with U.S. standards, South Korea bids for private companies to enter the game

Since May, Musk has brought the fever of digital currencies to its peak, and the fever of central bank digital currencies was brought to fire by the Fed. on May 20, Fed Chairman Jerome Powell pointed out in a video address that the Fed plans to release a discussion paper on the benefits and risks of issuing central bank digital currencies for broad public comment this summer.

A statement that has global central banks dancing on the scent.

Bank of Japan still takes serial measures
At the end of March 2021, near the end of Japan’s fiscal year, the start of the first phase of pilot operations was finally announced, and after a bidding process, the Bank of Japan selected Hitachi, Ltd. as the partner for the technical implementation of the CBDC infrastructure.

On May 25, five days after the Federal Reserve announced the importance it attached to the CBDC study, the Bank of Japan released the study report “Standardization on Digital Currency Information Technology” (hereinafter referred to as the report).

The report focuses on the Bank of Japan’s perception and definition of technology standardization, which includes 3 main points: interoperability, trustworthiness, and extensive solicitation of professional opinions. The report argues that interoperability between digital currencies can be ensured through standardization of transmission message formats, data items, numbering and code systems; and the reliability of digital currencies can be ensured through compliance with appropriate international standards.

In fact, the whole article mainly wants to emphasize the international common basic technology, if it can’t be connected with the international, the CBDC development between countries is meaningless, just domestic or regional self-help, and it can’t realize the original purpose of financial inclusion at all.

But the report will be the U.S. standards called international standards, is really “very Japanese”. According to the report, the U.S. National Institute of Standards and Technology (NIST) published the research results in July last year, and the 15 encryption methods of quantum computing encryption technology was formulated as a standardized technology, and a formal standardization bill will be published next year, that is, in 2022.

In a previous article, Chaintech also pointed out that the Bank of Japan has never thought of All In from the beginning, but mainly relied on the integration of resources from private institutions and then technical exchanges with international central banks, especially in Europe and the United States, to achieve a lay win.

In the report, the Bank of Japan still emphasizes the cooperation with the seven major central banks in Europe and the United States, and says that the Bank of Japan will actively participate in the standard-setting seminars of the ISO/TC 68 group.

Perhaps Japan is a market with high cost of trial and error, and Japanese banks are not afraid to make rash moves and need to watch the international wind direction. Moreover, the Bank of Japan also very much want to engage in independent digital yen, and very much want to learn from China. However, Japan is somewhat difficult to ride the tiger, the Chinese market is more complex on the one hand, can not offend the United States is also Japan’s “consensus”.

This point, South Korea is also in the face. Almost the same day as the Bank of Japan, the South Korean side announced that the tender to find a private company to work with the central bank to study CBDC.

Korea’s giant fist pump
Bank of Korea’s CBDC development public announcement relatively early, announced in July last year to complete the end of the first pilot, August 31 for the second round of pilot bidding, “The Korea Times” said the second round of pilot will be carried out in the second half of 2021, and the Bank of Korea has not issued CBDC in 2020, is also the same as the Bank of Japan, to conduct “research “.

With the pilot of the digital yuan, coupled with the clear statement of the Federal Reserve, the Bank of Korea accelerated the process of CBDC in the country. May 24, the Bank of Korea released the “2020 Expenditure Final Report”, the report said it will import CBDC, will be selected in the country a company, the digital currency pilot platform to build. It is reported that the Bank of Korea spent 4.96 billion won on its budget.

This is also the first time that South Korea has announced that it is really conducting a pilot CBDC issuance, so this is the first phase of the CBDC experiment in the true sense.

It is reported that the pilot run in Korea will take place from August to December, and the pilot will also feature basic online payment, transfer and savings functions. The second phase will start next year, mainly to test basic functions such as disconnected payment and settlement.

These, as the discerning eye can see, have long been completed by the People’s Bank of China.

The current fist-pumping Korean tech giants are search engine giant Naver and social media Kakao, but Naver, the number one portal in Korea founded in 1999, is also the parent company of Line, the largest social networking site in Japan and Korea. Line has now merged all of its Japanese operations with Softbank and pulled together the dying Yahoo to create the new Z Group.

It is a nationalization strategy for Naver itself, but it is not good for Naver in Korea. It is a question mark whether the Bank of Korea will give such a core CBDC project to Naver.

Moreover, Line is currently involved in a scandal in Japan and is under investigation by the Japanese Financial Services Agency for data leakage.

Kakao is a purely Korean technology company that started to get involved in the digital currency industry in 2018 when ICOs started to catch fire and established Kakao Blockchain, but then the Korean government banned ICOs and the company was forced to move the center of its strategy overseas, and the current operational status is unclear, but from public media information, Kakao currently holds shares in the digital currency However, from public media information, Kakao currently holds 20% of the shares of Doonamu, the parent company of digital currency exchange “UPbit”. Kakao has also been involved in the artificial intelligence and Internet of Things industries in recent years.

Samsung, Korea’s largest multinational giant, would have been a great partner, and Samsung has been among the world’s top spenders on technology research and development. However, Samsung is in a state of limbo because of its close contact with politics and the arrest of the head of the company earlier this year. And as a plutocrat, the Samsung empire may become a thorn in the government’s side from now on, the technology research and development capabilities are strong, and may not be able to take this responsibility for a while.

Who will compete with digital currency
In October 2020, G7 central banks and the Bank for International Settlements (BIS) released a report on the feasibility of digital currency, “Central Bank Digital Currency: Fundamentals and Core Features,” which gave the conclusion that 20% of the world’s population is expected to hold CBDC within three years.

Although Zhou Xiaochuan, the former governor of the People’s Bank of China, has also repeatedly emphasized that the digital RMB was not originally designed to replace the reserve currency status of the US dollar or the international payment currency status, nor was it intended to replace the current role of third-party payments. However, seizing the high ground in the field of digital currency is already a big issue facing all countries now.

At present, among the world’s major economies, in addition to China’s digital renminbi pilot success and will be officially put into use in the Winter Olympics, the real put into use is also known as the world’s first eye-catching digital currency, the Bahamas’ sand currency.

In addition to the various studies by the 7 major central banks in Europe, the United States and Japan, the implementation aspects of the countries are also very interesting. The Bank of Great Britain also recently announced that it may issue a digital currency called Britcoin; Sweden’s central bank (Sveriges Riksbank), the central bank’s digital currency project e-krona plan to be implemented in 2018, is also very loud, is expected to complete the pilot in November this year; Europe also has a financially developed Switzerland on the USC project aimed at bank transfer business, the The project is led by UBS.

I don’t know when this war of opinion will end.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/cbdc-battle-for-position-japan-stands-in-line-with-u-s-standards-south-korea-bids-for-private-companies-to-enter-the-game/
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