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- Laos central bank and Soramitsu study the feasibility of establishing a CBDC
- The study will be out by the end of the month
- Surge in CBDCs is increasing in the world
Following suit with China, Laos is the next country to adopt a central bank digital currency. The Southeast Asian country has partnered with Soramitsu, a Japanese business that previously worked with Cambodia on a similar project. In a PwC report on the best CBDCs, the latter previously published a CBDC, which was listed among the Bahamian Sands Dollars.
The central bank of Laos and Soramitsu are studying the feasibility of establishing a CBDC in the country. As the country strives to digitise its economy, the first study will be released by the end of the month. Bank of Lao People’s Democratic Republic signed a memorandum of understanding in agreement with the Japan International Cooperation Agency on the study of the development of a CBDC.
The assumption is that, like other larger nations working on a CBDC, a national digital currency will aid in understanding how the economy works by providing vital data. IFinancial inclusion will also increase, which is an important incentive in many countries. Soramitsu will lead the investigation into the role of banks and intermediaries.
Banks adopt CBDC
The news that another country is considering a CBDC is not surprising to the market, which has recently experienced a boom in demand for CBDCs. Banks would like to use the technology for their currencies now that the crypto market is more or less recognised as an asset class. The advantages are obvious, and they cannot afford to be ignored.
Many countries first ignored CBDCs, with only a few, notably China, recognising their potential. Central banks and governments are deploying digital currencies to some extent to offset the ever-increasing prevalence of cryptocurrencies. China, once again, is a prime example, having banned cryptocurrencies and pushing for wide acceptance of its digital yuan.
Stablecoins, in particular, have been a source of frustration for authorities, with countries such as the United States eager to regulate them in order to preserve the dollar’s sovereignty. Developing countries tend to follow suit, mimicking the approach of large economies to asset class.
These considerations have led to a greater emphasis on the establishment of CBDCs, the number of countries doing so has increased significantly over the past year. Only a few countries from this long list include Russia, India, and Sweden. These countries, unlike China, do not want to outright outlaw cryptocurrency. In India, for example, bitcoin is considered a commodity.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
