Bank for International Settlements (BIS) study reveals global progress in CBDC adoption and wholesale use
In a recent survey conducted by the Bank for International Settlements (BIS), it has been projected that around 15 retail central bank digital currencies (CBDCs) could be in circulation across the world by the end of this decade. The BIS, a Switzerland-based body owned by 63 central banks representing approximately 95% of the global economy, also disclosed that nine central banks have expressed a high likelihood of issuing a CBDC for wholesale use in financial markets within the next six years.
Survey Highlights Widespread CBDC Efforts
The comprehensive study, which involved surveying 86 central banks, revealed that a staggering 93% of them are currently undertaking CBDC work. Notably, major jurisdictions such as India, the United Kingdom, and the European Union are taking serious steps towards exploring the issuance of digital versions of their fiat currencies. CBDCs are being viewed as a potential means to assist the unbanked population, particularly in emerging economies.
Retail CBDCs to Complement Existing Payment Methods
The report emphasizes that if retail CBDCs are issued, they are expected to coexist and complement other domestic payment methods. It further recognizes that stablecoins and other crypto assets are currently seldom used for payments outside the crypto ecosystem. However, they have gained popularity in cross-border remittances and consumer purchases.
Central Banks’ Changing Sentiments towards CBDCs
Compared to a previous BIS survey published in May 2022, central banks have become more cautious about issuing CBDCs. The survey found that the number of central banks expressing their likelihood of not issuing a CBDC anytime soon has increased over the year, with fewer remaining undecided. This shift in sentiment may be attributed to market volatility and the impact of the 2022 cryptocurrency crash.
Global CBDC Initiatives and Concerns
Several countries have made notable progress in implementing CBDCs. The Bank of England has indicated the necessity of a digital pound in the future, while the European Commission recently introduced a bill aimed at establishing a digital euro. In the United States, the Treasury is actively exploring ways to ensure the privacy of digital transactions.
While retail CBDCs have already been implemented in the Bahamas, Eastern Caribbean, Jamaica, and Nigeria, pilot projects for a digital yuan in China have raised concerns regarding potential state surveillance through this technology.
Shaping the Future of Global Currencies and Digital Payments
The survey results indicate a growing global interest in CBDCs, signifying a significant shift in the financial sector. As more central banks explore the adoption of CBDCs, these digital currencies are expected to reshape the landscape of global currencies and digital payments, while coexisting with existing payment methods.
With the projected increase in retail CBDCs and the likelihood of central banks issuing CBDCs for wholesale use, the world may witness a transformative period in the evolution of digital currencies and their integration into everyday financial transactions.
Disclaimer
The information presented in this Blogpost is solely for educational and informative purposes and should not be misconstrued as investment, financial or legal advice. Cryptocurrencies are a highly unstable and speculative market and their worth is susceptible to substantial fluctuations. Therefore, it is advisable to conduct personal research and seek counsel from qualified experts before making any financial decisions.
