Europe, Japan, and India

Europe, Japan, and India in the CBDC Wars: Where They Stand

The US-China battle over CBDCs is reshaping global finance, but Europe, Japan, and India are key players with their own strategies. Here’s how they’re positioning themselves—and what it means for the future of money.

1. Europe’s CBDC Strategy: The Digital Euro

Status:

• ECB (European Central Bank) in advanced testing phase (2023-2026 pilot).

• Expected launch: 2027-2028.

Key Goals:
✔ Preserve euro’s role vs. dollar & digital yuan.
✔ Avoid dependency on US (SWIFT) or China (mBridge).
✔ Privacy focus (offline transactions possible).

Challenges:
❌ Political resistance (Germany fears state surveillance).
❌ Bank pushback (worried about deposit flight to CBDCs).

Geopolitical Stance:

• Aligned with US but independent—may join a "Western CBDC alliance" (with UK, Canada).

• Not joining mBridge (too China-dominated).

Impact on Ripple/SWIFT:

• SWIFT stays relevant (for euro trade outside CBDC zones).

• Ripple could integrate if the ECB allows private-sector bridges.

2. Japan’s Approach: The Digital Yen (DCJPY)

Status:

• Bank of Japan (BoJ) testing since 2021, but no firm launch date.

• Private sector DCJPY project (by banks & brokers) may launch first.

Key Goals:
✔ Counter China’s digital yuan in Asia.
✔ Improve cross-border payments (especially with ASEAN).
✔ Keep yen relevant as China pushes e-CNY.

Challenges:
❌ Public distrust (Japan loves cash—50% of transactions still use it).
❌ Tech delays (BoJ cautious after past digital failures).

Geopolitical Stance:

• US-aligned but hedging—may join mBridge if China softens.

• Exploring Ripple for JPY-ASEAN remittances (SBI Holdings partnership).

Impact on Ripple/SWIFT:

• Ripple has an edge in Japan (strong banking partnerships).

• SWIFT remains dominant for JPY-USD/EUR flows.

3. India’s Digital Rupee (e-Rupee): The Dark Horse

Status:

• Launched wholesale CBDC (2022), retail pilot (2023).

• 1M+ users already in trial phase.

Key Goals:
✔ Kill crypto dominance (India is the #1 crypto market by volume).
✔ Challenge China’s e-CNY in Global South.
✔ Modernize payments (compete with UPI’s success).

Challenges:
❌ Tech literacy gaps (rural adoption slow).
❌ Private sector resistance (Paytm, PhonePe fear disruption).

Geopolitical Stance:

• Neutral but anti-China—won’t join mBridge but may link with BRICS CBDC.

• Open to Ripple (ICICI Bank tested XRP in 2018).

Impact on Ripple/SWIFT:

• Ripple could win big if India uses XRP for remittances ($125B/year market).

• SWIFT remains for USD/EUR trade.

4. How This Affects the Global CBDC Battle

Key Takeaways:

1. Europe wants a digital euro to stay independent—but won’t ditch SWIFT.

2. Japan is hedging bets—could work with both Ripple and mBridge.

3. India is the wildcard—if it embraces XRP, Ripple gets a massive boost.

4. The US-China fight is forcing everyone to pick sides—except Bitcoin.