The Central Bank of Tunisia has issued for testing, a Central Bank Digital Currency (CBDC) “E-dinar.” Russia-based Universa has created the blockchain for the E-dinar. According to Universa, it is the first Central Bank in the world to convert a part of its reserves into digital currency.
The CBDC will be issued online as well as through 2000 kiosks that open throughout Tunisia. It can be used to make payments in restaurants, cafes, shops, etc. by scanning a QR code. It has also planned to make international payments, thus bypassing the US dollar.
Users will have a digital wallet that they can top up via a browser application. A mobile app is planned for the future.
Universa’s CEO, Alexander Borodich, explains why CBDC is not a cryptocurrency. It is not a separate currency; it is the digital version of fiat currency. Further, he says that as CBDC will run on blockchain technology, it means,
Electronic banknotes cannot be faked – each such banknote, like the paper version, is protected by cryptography… And the production of such a banknote is 100 times cheaper than wasting ink, paper, electricity for the printing press.
The major difference between Cryptocurrency and CBDC is that cryptocurrency uses cryptography to secure transactions, while CBDC uses cryptography to secure electronic banknotes. Quantity of CBDC is linked with fiat currency, and hence, it cannot be mined like a cryptocurrency. CBDC is akin to stablecoin as every electronic banknote will be backed by physical fiat currency.
Universa cannot see transactions, nor can it access encryption keys. It claims that Malaysia, Argentina, Brazil, and China could also convert a part of their reserves into CBDC.