Digital currency has become a hot topic in the last few years, and countries worldwide are considering issuing their own. But which country made the move first and actually adopted its own digital currency? In this article, we will take a look at the history of digital currencies and take a look at the first country to start a national digital currency.
From the Origins of Digital Currencies
Digital currency has been around since the 1980s, but it only began gaining real traction after the introduction of the cryptocurrency Bitcoin in 2009. Bitcoin was invented as a digital currency in 2009 by the pseudonymous Satoshi Nakamoto.
Early Adoption
As the first decentralized digital currency, Bitcoin wasn’t a national digital currency issued by a government, however. But this is when the reality of digital currencies started to be taken seriously by governments and sparked interest in central bank digital currencies (CBDCs).
The 1st National Digital Currency
Ecuador was the first country to officially implement a national digital currency. In 2014, the government of Ecuador introduced the Sistema de Dinero Electrónico, or Electronic Money System, which let citizens hold balances denominated in the Ecuadorian sucre, the country’s former currency that was supplanted by the US dollar.
The Ecuadorian digital currency was not widely adopted and it faced several challenges including technical issues and little public interest. The project was ultimately abandoned as a result.
China’s Digital Yuan
Ecuador may have become the first country in the world to launch a national digital currency, but it is China year to year that made great strides in developing a CBDC. China has been testing its digital yuan, or digital renminbi, in a few cities as of 2020. The digital yuan is intended to work alongside physical money and is set to be fully deployed in the next few years.
The digital yuan will be a significant milestone in the evolution of digital currencies, as it is the first major economy to take the leap towards creating a national digital currency.
Other Countries That Are Considering Digital Currencies
Other countries, including Sweden, Sweden’s own e-krona and the Bahamas, which launched the Sand Dollar in 2020, are also experimenting with their own digital currencies. These initiatives mark the increasing interest in digital currencies among governments globally.
Conclusion
Ecuador became the first country to officially a national digital currency, but it was China to make the most headway on a central bank digital currency with its digital yuan development. Data used for training is limited till Oct 2023.