According to a poll, 24 central banks will use digital currencies by 2030
By the end of the decade, almost two dozen central banks in both emerging and developed economies anticipate using digital currencies, according to recent research by the Bank for International Settlements (BIS). To prevent leaving digital payments to the private sector in the face of an accelerated drop in cash, central banks all over the world have been researching and developing digital versions of their currencies for retail use. For transactions involving financial institutions, some people are also considering wholesale versions. According to the BIS’ survey of 86 central banks conducted in late 2022, the majority of the new central bank digital currencies (CBDCs) will appear in the retail sector, where eleven central banks could join peers in the Bahamas, the Eastern Caribbean, Jamaica, and Nigeria that already operate live digital retail currencies.
Nine central banks may establish CBDCs on the wholesale side, which in the future may enable financial institutions to access new functions due to tokenization, according to the BIS. The research authors stated that one of the main reasons central banks are working on wholesale CBDCs is to improve cross-border payments. The European Central Bank is ready to start its digital euro trial before a potential launch in 2028. Meanwhile, the Swiss National Bank said in late June that it would issue a wholesale CBDC on Switzerland’s digital exchange as part of a pilot. 260 million individuals in China have now participated in pilot testing, and two other significant growing economies, India and Brazil, intend to introduce digital currencies the following year.
According to the BIS, 93% of central banks surveyed participated in CBDC in some capacity, with 60% reporting that developing stablecoins and other crypto assets had sped up their efforts. The crypto industry saw instability over the previous 18 months, including the failure of TerraUSD, an unbacked stablecoin, in May 2022, the fall of crypto exchange FTX in November, and the insolvency of banks that provided services to cryptocurrency providers, including Silicon Valley Bank and Signature Bank. Even though these events had little to no effect on conventional financial markets, they did cause sell-offs in several crypto assets. According to the poll, over 40% of respondents said their central bank or other organizations under their authority have recently researched how consumers and companies use stablecoins and other crypto assets. The BIS research stated that stablecoins and other crypto assets “may threaten financial stability if widely used for payments.”
