Central banks in 73 of the 81 countries studied are working to implement their own CBDC, according to the research.
The Bank of International Settlements (BIS) estimates that nine out of 10 central banks are looking into the possibility of releasing their own CBDC in their most recent study. As a result, 50% of those financial institutions are now working on or experimenting with new financial products and services.
81 central banks were quizzed by the International Monetary Institute (BIS) to find out how they felt about CBDCs and whether or not they were close to implementing one. Ninety percent of those polled said they are actively pursuing the introduction of the product. Over half of the world’s central banks are working on or have already begun “concrete tests” with CBDC.
A retail CBDC is expected to be issued by more than two-thirds of the world’s central banks in the near or medium future. Current payment systems’ restricted operation hours and long transaction chains are among the issues that central banks believe CBDCs can address, according to the BIS.
China’s initiatives in the area of CBDCs are worth highlighting. In contrast to cryptocurrencies, the Chinese government is strongly in favour of the digital yuan idea and often launches efforts aimed at promoting its use.
e-CNY transactions totalled almost $300,000 per day during the Winter Olympics in Beijing, thanks to the inclusion of the financial instrument as a payment mechanism.
Officials in big cities including Beijing, Shenzhen, and Chengdu received large sums of money. Malaysia, Thailand, Zambia, Indonesia, Mexico, and other nations are also looking at the possibility of launching such a project or conducting trials in the future.
Additionally, the BIS examined stablecoins and cryptocurrencies in their research. Stablecoins backed by a single fiat currency was envisioned as a possible payment option by the organisation. Conversely, it wasn’t as optimistic about investments tied to commodities or digital assets like bitcoin.
According to a BIS poll, 80 percent of the world’s central banks are now working on developing their own CBDCs. However, it’s important to note that this study was completed in 2019 with 66 participants rather than the expected 81.
Banks from emerging market economies rather than mature economies were the only ones that acknowledged testing their potential CBDCs at the time.
“EMEs often have a greater incentive to work on general-purpose CBDCs than advanced economies” (which can act as a substitute or complement to banknotes). When it came to domestic payment systems in EMEs, speed, security, and accessibility were all rated as “extremely significant.” Payment security was the only factor that mattered a lot to advanced economies.
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