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Line Plus wishes for its platform to suit the needs of several central banks.
LINE PLUS, a South Korean software and technology services firm owned by Japanese multinational conglomerate SoftBank, has launched a blockchain platform to assist central banks in launching CBDCs.
CBDCs are basically central bank-backed, state-controlled digital currencies, which is a long cry from the concept of a stateless monetary system espoused by early Bitcoin supporters.
But they’re big news, and LINE thinks they’re going to blow up in Asia. In a press release today, Line claims to be in talks with “central banks in various Asian countries” about its open-source CBDC technology, Line Financial Blockchain for CBDCs.
Each Asian central bank’s concept of a CBDC is unique, and projects are not created in the same way. Cambodia’s CBDC is similar to cash and is run on a blockchain, but Thailand and Hong Kong are working on a CBDC that allows cross-border transfers between banks.
China is far and away the most advanced; it is testing its not-a-cryptocurrency digital yuan, which operates as a digital version of cash (to supplement its world-leading digital payment networks). Some believe China’s recent assault on cryptocurrencies such as Bitcoin is an attempt to put digital currency under official control.
Outside of Asia, several banks, including the Federal Reserve and the European Central Bank, have yet to commit to specific designs—or even determined that blockchain is the way to go. Nonetheless, they are intrigued: Last month, the ECB cautioned European governments that if they do not implement CBDCs, they risk losing monetary autonomy to the private sector.
Again, everyone is unique. In the Middle East, the Bank of Israel determined that a digital shekel might simplify Israel’s economy, but the Palestinian Monetary Authority found that its own digital currency could reduce Palestine’s reliance on Israel.
LINE anticipates that blockchain will be a major deal in CBDCs, but that is about all it has predicted. As a result, it has tailored its blockchain technology to the specific needs of each potential central bank.
Its new platform supports Know Your Customer (KYC) and Anti-Money Laundering (AML) and has a modular structure, allowing for different features to be added by developers as needed. Line’s blockchain is built on Cosmos SDK, which is an open-source framework for building proof-of-stake blockchains that can natively interoperate with other blockchains.
Line Plus is not the first private business to propose a blockchain solution to central banks interested in issuing CBDCs. Ripple, the creators of XRP, revealed in March that it has developed a private blockchain for central banks wanting to issue their own CBDCs.
With more CBDC news coming out every week, there are plenty of reasons to believe that crypto’s early libertarian principles are losing way to a state-issued and tightly controlled digital economy.