In its most recent research, the Bank for International Settlements (BIS) estimated that nine out of ten central banks figure out how to issue their own CBDCs. Furthermore, 50% of those financial institutions are currently developing such products or undergoing experiments.
Most Central Banks Are Interested in a CBDC
The International Monetary Institute – the BIS – questioned 81 central banks to determine their stance on CBDCs and how close they are to launching one. According to the results, 90% of the participants admitted that they are working towards introducing that product. Nearly half of central banks are in the middle of developing or “running concrete experiments” on CBDCs.
“Globally, more than two-thirds of central banks believe they can or will likely issue retail CBDCs in the short or medium term. Central banks allow CBDCs with limited operating hours of the current payment system. And consider it capable of mitigating key pain points such as the length of the current transaction chain,” BIS said.
Speaking of CBDCs, it is worth mentioning China’s efforts. Unlike cryptocurrencies, local authorities are in favor of the digital yuan concept and often launch initiatives aimed at popularizing it.
The financial product was included as a payment method during the Beijing Winter Olympic Games, with daily transactions accounting for approximately $300,000 in e-CNY.
In addition, Chinese authorities distributed significant amounts to residents of major cities such as Beijing, Shenzhen and Chengdu.
Other countries with potential launches or trials of such a project include Malaysia, Thailand, Zambia, Indonesia, Mexico and others.
In addition to CBDCs, BIS touched on 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 fast for those involved in commodities or digital assets like bitcoin.
80% to 90%
A previous BIS survey on the matter determined that 80% of central banks are working on introducing their own CBDCs. However, it is worth mentioning that the research was conducted in 2019, and included 66 participants instead of 81.
At the time, all banks that accepted testing their future CBDCs came from an emerging market economy rather than an advanced market economy:
“EMEs generally have stronger motivations to operate on general-purpose CBDCs (which can act as a substitute or supplement to banknotes) than advanced economies. Domestically Payment efficiency, payment security and financial inclusion, on average, were all considered “very important” for EMEs in this regard. For advanced economies, payment security was the only motivation that was cited as very important.”
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