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We have collected data on 63 blockchain-related experiments involving central bank leaders of G20 member countries. We found that in different application scenarios such as Central Bank Digital Currency (CBDC), Tokenization, DeFi, etc., a considerable number of projects (47% in the sample) are compatible with the Ethereum Virtual Machine (EVM), which means they are based on Ethereum's technology stack. Additionally, more and more projects are being launched on public blockchains, demonstrating that public, permissionless infrastructure is not in conflict with the demands of regulatory authorities.
Our research results emphasize several important facts:
Innovation always occurs at the edges and is ultimately adopted by existing institutions. Therefore, hindering innovation inevitably reduces the scope of mature technology. Even if central banks are skeptical about cryptocurrencies (which they indeed are), they are still leveraging the technology of the permissionless world with their unique background. If the U.S. government stifles innovation in information and communication technology (ICT), Fedwire communications might still be using teleprinters and Morse code. As a result, central banks are starting to move beyond basic CBDC and payment projects, now exploring tokenization and DeFi. These projects are becoming increasingly complex and are being deployed more frequently on public, permissionless blockchains.
According to our view, here are some of the most interesting projects:
Mariana Project: A cross-border foreign exchange project using tokenized central bank currencies and AMM (Automated Market Maker) on the Sepolia test network of Ethereum.
Guardian Project: Three sub-projects aimed at building liquidity pools, structured notes, and asset-backed securities using Ethereum's second-layer solutions for trade finance.
It is still too early to predict how many projects will be deployed on public networks by 2024, but we believe that more projects will emerge from now on. As mentioned earlier, the Monetary Authority of Singapore (MAS) has launched some of the most innovative projects in this area. MAS is undisputedly a leader in this field, and its moves indicate that deploying projects on blockchains with permissionless validator sets does not fundamentally violate sanction laws.
Network effects are crucial, and we believe this once again demonstrates that Ethereum has the strongest developer ecosystem among major Layer 1 chains today. According to some rumors, we have heard that some traditional financial institutions have abandoned proprietary enterprise blockchains in favor of EVM-based blockchains due to the strong developer community (such as development tools, human resources, etc.).
Open-source software has been battle-tested. Currently, most of the internet runs on servers based on Linux, and the future of the financial industry is no exception. While cryptocurrencies often have adversarial traits, one often underestimated benefit is that projects deployed on public blockchains (and blockchain itself) have undergone significant stress testing in the wild, whether in terms of security or economic design.
The United States is lagging behind, but it has the opportunity to create a positive feedback loop. In our sample, the United States completed 5 public projects, while Singapore, with a significantly smaller capital market scale, completed 8 projects (some of which have additional phases that we did not separately record).
At first glance, this may not seem optimistic. However, as long as other countries continue to leverage EVM-based open-source software projects, we believe the United States has the opportunity to lead by being the home to many of the most ambitious builders. As U.S. technology is exported to other parts of the world, American values will also be disseminated. We are particularly excited to see that the Federal Reserve Bank of New York has begun to adopt Rust technology. |
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Post time 14-4-2024 07:12:40