Progress, Launches, and Pilots in the Global Adoption of CBDCs
Date: June 29, 2023
Place: New Delhi, India
A recent study conducted by the U.S.-based Atlantic Council think tank has shed light on the increasing global interest in central bank digital currencies (CBDCs). The study found that a staggering 130 countries, representing 98% of the global economy, are currently exploring the development of digital versions of their currencies. This educational article aims to provide an overview of the study’s key findings and highlight significant developments in the world of CBDCs.
Advanced Development, Pilot, or Launch Stages
Almost half of the countries involved in the study have progressed to advanced development, pilot testing, or even launch stages of their CBDC projects. This indicates a significant advancement in the implementation of digital currencies across various nations. Notably, all G20 countries, with the exception of Argentina, have reached one of these advanced phases.
CBDC Launches
Eleven countries, including several Caribbean nations and Nigeria, have successfully launched their CBDCs. These pioneering countries have taken significant steps toward integrating digital currencies into their economies. Moreover, China’s pilot testing for its CBDC has reached a staggering 260 million people and encompasses 200 different scenarios, ranging from e-commerce to government stimulus payments.
Future Launch Plans
India and Brazil, two major emerging economies, have announced plans to launch their own digital currencies in the coming year. Furthermore, the European Central Bank aims to commence its digital euro-pilot, potentially leading to an official launch by 2028. Over 20 other countries are also set to take substantial steps toward conducting pilot projects in the current year.
U.S. Progress and Challenges
In the United States, progress on a digital dollar is primarily focused on the wholesale version for bank-to-bank transactions. However, the research indicates that the development of a retail version accessible to the wider population has encountered obstacles. President Joe Biden has instructed government officials to evaluate the risks and benefits of creating a digital dollar, emphasizing the importance of thorough assessment.
Global Implications and Motivations
The international drive for CBDCs is influenced by declining cash usage and the need to counter the growing influence of Bitcoin and ‘Big Tech’ companies in the financial sector. Furthermore, recent sanctions imposed on countries like Russia and Venezuela have prompted nations, including European allies, to seek alternatives to traditional payment networks such as Visa, Mastercard, and Swift. The study also highlights a notable increase in wholesale CBDC developments following Russia’s invasion of Ukraine and subsequent G7 sanctions.
Prominent CBDC Initiatives
Sweden stands out as one of Europe’s frontrunners in CBDC development, with an advanced pilot program underway. Additionally, the Bank of England is actively researching the feasibility of a digital pound that could be in circulation by the second half of this decade. Australia, Thailand, South Korea, and Russia also plan to continue pilot testing throughout the current year.
To Sum Up
The global interest in central bank digital currencies continues to grow rapidly. With 130 countries involved in exploring CBDCs, significant progress has been made, ranging from advanced development to pilot testing and even official launches. While challenges and disparities exist among nations, the exploration of CBDCs represents a transformative shift in the future of money and its digital evolution.
Disclaimer
The information presented in this educational research article is based on an original news article published by Reuters. The content has been rephrased and summarized by CurrencyVeda to provide educational value to our users. We do not claim ownership or authorship of the original article, and readers are encouraged to refer to the original sources for detailed information and accurate reporting.
