90% Of Central Banks Are Considering Launching CBDCs
The Bank of International Settlements (BIS) recently predicted that nine out of 10 central banks are looking towards releasing their own CBDCs. Furthermore, 50 percent of those financial institutions are presently creating or testing such products.
CBDCs are of interest to the majority of central banks
The international monetary institution – BIS – questioned 81 central banks to determine their stance on CBDCs and how close they are to launching one. Per the results, 90% of the participants admitted they work towards introducing that product. Nearly half of the central banks are in the midst of developing or “running concrete experiments” on CBDC.
“Globally, more than two-thirds of central banks consider that they are likely to or might possibly issue a retail CBDC in either the short or medium term. Central banks consider CBDCs capable of alleviating key pain points such as the limited operating hours of current payment systems and the length of current transaction chains,” the BIS stated.
Speaking of CBDCs, it is worth mentioning China’s efforts. Contrarily to cryptocurrencies, the local authorities are highly in favor of the digital yuan concept and often launch initiatives that aim to popularize it.
The financial product was incorporated as a payment method during the Beijing Winter Olympic Games, with daily transactions accounting for approximately $300,000 in e-CNY.
Moreover, the Chinese officials distributed significant amounts to the residents of major cities like Beijing, Shenzhen, and Chengdu.
Other countries exploring the potential launch of such a project or conducting trials include Malaysia, Thailand, Zambia, Indonesia, Mexico, and others.
Apart from CBDCs, the BIS touched upon stablecoins and cryptocurrencies in its study. The institution envisioned that stablecoins backed by a single fiat currency could emerge as a payment method. At the same time, it was not so bullish on those pegged to commodities or digital assets like bitcoin.
From 80% to 90%
The BIS’ previous survey on the matter determined that 80% of the central banks are working on rolling out their own CBDCs. However, it is worth mentioning that the research was conducted in 2019, and it included 66 instead of 81 participants.
Back then, all banks that admitted testing their future CBDCs came from an emerging market economy rather than an advanced one:
“EMEs generally have stronger motivations than advanced economies to work on general-purpose CBDCs (which can act as a substitute or complement to banknotes). Domestic payments efficiency, payment safety, and financial inclusion were, on average, all considered “very important” in this respect for EMEs. For advanced economies, the only motivation ranked as very important was payment safety.”
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