Central bank digital currency momentum growing, study shows

Central banks around the world are increasingly embracing the concept of digital currencies, according to a study conducted by the Atlantic Council think-tank. The research revealed that 134 countries, representing 98% of the global economy, are currently exploring the development of central bank digital currencies (CBDCs), with almost half of them at an advanced stage. China, the Bahamas, and Nigeria have emerged as pioneers in this field, with their CBDCs experiencing a surge in usage. China’s e-CNY, the world’s largest pilot scheme, has witnessed a significant increase in transactions, reaching 7 trillion yuan ($987 billion). This counters the notion that launched CBDCs see low or no usage, signifying a growing interest in digital currencies among consumers. Additionally, major central banks such as the European Central Bank and the United States have made significant strides towards their own CBDC initiatives. Despite this progress, concerns about privacy and other factors surrounding CBDCs persist, particularly in the United States where legislation has been passed to prohibit the direct issuance of a public-oriented CBDC. Nevertheless, the adoption of wholesale CBDC projects, limited to bank-to-bank transactions, has surged to 13, including the mBridge project that connects CBDCs from China, Thailand, the UAE, Hong Kong, and Saudi Arabia. Overall, the study highlights that while some countries are making significant progress in the development and implementation of CBDCs, others, like the United States, remain behind the curve.