On November 7, 2019, Tunisia has become the first country in the world to launch its Centrally Backed Digital Currency (CBDC). The small North African country surprised the world by launching its digital equivalent of its Dinar.
The CBDC (the E-dinar) was tested at the Forex Club of Tunisia, with a symbolic transfer of one Dinar from the central bank’s head, Marouane El Abassi to an International Monetary Fund representative.
The blockchain technology that powers the E-dinar has been provided by a Russian based company, Universa. The partnership with Universa firm helped Tunisia launch its digital currency and convert a portion of its money into electronic and cryptic form.
First live CBDC
The tech provider and underlying blockchain platform, Universa, claims that this means Tunisia is the first country to issue a Central Bank Digital Currency (CBDC). Indeed, it is the first to announce that some of its capital has been converted to electronic form while the Venezuelan Petro and Chinese Yuan are considered as a cryptocurrency.
The Crypto Dinar has been made available to the citizens. Soon, the country will be providing the infrastructure to public and private businesses even small businesses such as grocery shops, bakeries, drugstores, etc to adopt cryptocurrency daily.
The CBDC will be issued to consumers online and through more than two thousand kiosks, which will be set up in Tunisia. There, they can add funds to a digital wallet through a browser application. Transfers are completed between people and businesses by scanning a QR code.
CBDC VS Cryptocurrency
Unlike cryptocurrency, CBDC is controlled and overseen by the government regulator, the Central Bank. They are exactly opposite to decentralized cryptocurrencies such as Bitcoin in that they represent fiat money in digital form.
Each CBDC digital note is a digital equivalent of actual paper note with its face value and serial number, which exists in digital form and is protected from forgery by Universa Blockchain technologies.
Alexander Borodich, the CEO of Universa, insists on making the distinction between the CBDC and cryptocurrency:
Electronic banknotes cannot be faked – each such banknote, like the paper version, is protected by cryptography, it, like the paper counterpart, has its digital watermarks. And the production of such a banknote is 100 times cheaper than wasting ink, paper, electricity for the printing press.
Indeed, CBDC combines the convenience and security of digital money with the proven functionality of national currencies regulated and backed by the country’s reserves.