Central Bank Digital Currency (CDBC) is a currency backed by central banks and is wholly owned by them. As
Bitcoin
and similar decentralized digital currencies have become more popular over time, central banks have also wanted to take part in the evolution of money.
It is accepted by many that the FED bank, which was able to successfully emerge from the economic crisis in the US in 2008, has proven itself. After the FED reduced interest rates during the crisis period and printed free money, it increased the interest rate in 2018 and started to burn some of the money it printed. In fact, the FED has reduced the value of the currency with these moves. Since its founding in 1913, there have been major declines in purchasing power.
But when it comes to bitcoin, a new and technological currency comes to everyone’s mind compared to the Fed. However, bitcoin currency is actually the name of the computer program that is running. The Bitcoin computer program, on the other hand, can be described as an automated global central bank.
Bitcoin has gained 260,000 times since the first day
Moreover, in the bitcoin system, no one is given privileges, no interests are taken into consideration and its functioning cannot be shaped according to any political event. When and how much will be produced and the half-time is clear from the beginning. In addition, since its production was limited to 21 million, it aimed to progress by gaining value. Bitcoin has appreciated nearly 260,000 times since it was first priced in 2010.
As central banks print money, the debt of the treasury and, by its influence, the public increases continuously. However, only computer power is used in the production of bitcoin and it is not produced in response to anyone’s debt.
The first digital currency trial is from France
According to the announcements made on May 20, France has become the first country to successfully experiment with the digital euro operating on blockchain, following a call for a new technology in the digital currency field at the end of March. On May 14, the Bank of France tested the sale of securities for its digital currency (CBDC) and stated that robust testing had begun.
Although the Bank of France did not provide details in its announcement, the current pilot program shows that it is focused on wholesale for the digital euro.
It is also known that Banque de France is particularly active in developing a digital euro. France, which is awaiting Britain’s departure from the European Union, could become the second-largest economy in the Eurozone after Germany. Recent developments bring this situation to the forefront.
