According to the Bank for International Settlements, most of the world’s central banks are developing CBDCs or conducting experiments to adopt them.
The central banks from all over the world are increasingly studying the possibility of creating a own digital currency.
According to a survey of Bank for International Settlements (BIS), nine out of ten central banks around the world are exploring central bank digital currencies (CBDCs).
Says the report: “This report presents the results of a survey of 81 central banks on their involvement in central bank digital currency (CBDC) work, as well as their motivations and intentions regarding CBDC issuance. Conducted in the fall 2021, the survey also asked for central banks’ assessment of the use of stablecoins and other cryptocurrencies (or crypto assets) in their jurisdictions.”
He adds: “Over the course of 2021, work on CBDCs gained further momentum. After the Bahamas launched a retail CBDC (the Sand-Dollar) in 2020, Nigeria followed in 2021 with the issuance of eNaira, and the Eastern Caribbean While the US and China have launched pilot versions of their respective DCash4 and e-CNY, there is probably more to come: a record share of central banks in the survey (90%) are engaged in some form of CBDC work.”Testing, testing
Motivations for Central Banks to launch their own crypto
More than half of the central banks surveyed are either developing CBDCs or “conducting concrete experiments,” according to the results. Additionally, around 20% are developing or testing a retail CBDC, which is double the number of central banks working on a wholesale digital currency.
The report adds that central banks seek to strengthen their banking and digital payments infrastructure.
Also, according to the CBDC tracker of the Atlantic Council, 87 countries representing more than 90% of the world economy are working on CBDC. “On average, nearly six in 10 central banks surveyed said this growth has accelerated their work on CBDCs,” the report says.
The jurisdictions represented in the BIS survey represent close to 76% of the world’s population and 56 of the central banks surveyed represent emerging and developing economies.
While the central banks of the Bahamas, China and Nigeria have already issued or are testing a retail CBDC, the survey found that other jurisdictions are likely to follow at 68% for the “foreseeable future”.
Other crypto issues
“Central banks differ in their expectations that stablecoins will grow and become widely used and accepted as a means of payment, depending on the type of stablecoin,” the report said, adding that central banks appear to believe that stablecoins backed for a single coin they are much more likely to succeed as a payment method over other types of commodity-pegged stablecoins or other cryptocurrencies.
Around 70% of central banks are investigating the potential impact of stablecoins on monetary and financial stability, while around a quarter are looking into the use of cryptocurrencies, Diario Bitcoin reported.