The Fantom Foundation is working with one of Tajikistan’s oldest and biggest banks, Orienbank, to build a Central Bank Digital Currency (CBDC) for the Republic of Tajikistan.
For the creation of E-SOM, the digitized version of the Tajikistani Somoni, the Foundation has signed a Memorandum of Understanding (MoU) with the bank.
Working with the National Bank of Tajikistan, Orienbank and Fantom will leverage the Layer-1 blockchain’s technology stack and further integrate YFI creator Andre Cronje’s Iron Bank protocol.
This CBDC equipped for retail and commercial payments will enable seamless low-fee foreign exchange with simple fiat on- and off-ramp. This functionality, according to the team, elegantly resolves the issue of foreign currency conversion – a limitation of CBDCs.
The digital fiat will be rolled out under the sandbox regulation of the National Bank of Tajikistan after going through a period of testing and refinement.
Despite the news, Fantom’s native token FTM’s price action was subdued as the broad crypto market tries to sustain the recovery after the China ban sell-off. Trading at $1.20, FTM is currently down 33.3% from its all-time high of $$1.92 made about 20 days back, but still up 7,309% YTD.
Issuance of Digital Fiat
As central banks around the globe make plans for a digital fiat, Chile’s central bank said it will decide on the strategy for the potential roll-out of its CBDC in early 2022.
The President of the Central Bank of Chile, Mario Marcel, said in a presentation before legislators that he has formed a high-level working group to study a medium-term strategy for introducing a “digital peso” in order to meet the needs of “increasingly challenging payments industry.”
“From objectives linked to the needs of the public, financial stability and effectiveness of monetary policy, the Central Bank will define, at the beginning of 2022, a proposal with options and requirements for an eventual issuance of a digital peso in Chile.”
During the presentation, Marcel noted that the use of digital payments in the country has soared, with over 40% of household consumption now made through credit cards, digital transfers, or similar systems.
The President said the working group would critically evaluate risks to its banking system, which the South American nation boasts as one of the region’s most stable and the efficiency of its monetary policy.