Malaysia has joined a growing group of countries to explore the value of researching and developing a central bank digital currency (CBDC).
Malaysia’s central bank, Bank Negara Malaysia, told Bloomberg on Monday that while no decision has been made on exactly how to proceed with a CBDC, research has focused on CBDCs “through proof-of-concept and experimentation to improve our technical and political capabilities.”
He also mentioned that the obvious reason for the current research is to ensure that the CBDC program is ready for launch “if there is a need for a CBDC issuance in the future.”
In 2021, Malaysia partnered with South Africa, Australia and Southeast Asia and its neighboring Singapore to develop a pilot CBDC called Project Dunbar, according to a joint announcement.
The Dunbar project used the Corda and Quorum blockchain platforms from r3 and ConsenSys, respectively, to demonstrate the potential for cross-border transfers across different blockchains. Specifically, it was intended to show how blockchain technology can “eliminate the need for intermediaries and reduce the time and cost of transactions.”
An increasing number of countries are exploring how the CBDC program works in their jurisdiction. China is by far the largest country currently implementing a CBD pilot program called the digital yuan, and since January 4, the mobile app has already been downloaded more than 20 million times. China plans to launch a program and allow foreign visitors to access the digital yuan on their passports during the upcoming Winter Olympics in Beijing next month.
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The Eastern Caribbean Central Bank (ECCB) issued the latest central bank digital currency, dubbed the “EU dollar,” in March 2021. In December 2021, Antigua was the latest of eight ECCB jurisdictions not to accept the European dollar. Neighboring Jamaica is also planning to launch a fully-fledged CBDC by the first quarter of 2022, after a successful pilot program ended two weeks ago.