World’s Central Banks and the Future of Digital Currencies
According to a survey by the Bank for International Settlements (BIS), up to 93% of the world’s central banks are currently exploring digital currency initiatives. Here are some key insights from the survey:
Central Banks Embracing CBDCs
- More than 90% of central banks worldwide are actively involved in CBDC projects.
- Up to 15 retail CBDCs are expected to be launched by 2030, targeting the general public.
- 60% of surveyed banks stated that the rise of cryptocurrencies has accelerated their CBDC development efforts.
Understanding CBDCs
Central Bank Digital Currencies (CBDCs) are digital currencies issued by a country’s central bank. Unlike cryptocurrencies, their value is controlled by a central authority and pegged to fiat currency.
Retail CBDCs are accessible to households and the public for transactions, representing a claim on the central bank. Wholesale CBDCs, on the other hand, facilitate inter-bank transactions and are not available to the public.
The vast majority of central banks are researching, testing, and consulting on CBDCs, with some already implementing retail CBDCs while others plan to in the near future.
The Future Landscape of CBDCs
- Some central banks have already issued retail CBDCs, while others, like the SNB and ECB, are planning to introduce wholesale or digital versions of their currencies.
- Collaboration with the private sector is a common theme among central banks, considering the involvement of private intermediaries in CBDC distribution.
Challenges in the U.S.
Despite the potential benefits highlighted by the Biden administration, the introduction of a U.S. CBDC may face opposition in Congress.
Recently, Senator Ted Cruz introduced a bill to hinder the Federal Reserve from launching a digital currency, citing concerns about privacy and government surveillance.
These debates underline the complexities and considerations surrounding the adoption of CBDCs in the future.
