BIS Study Predicts 15 Retail CBDCs in Circulation by 2030

By the end of the decade, there may be around 15 retail central bank digital currencies (CBDCs) in use, according to a new poll by the Bank for International Settlements (BIS), a group that represents 63 central banks worldwide. 86 central banks responded to the poll, and 93% of them are presently working on CBDC projects. Nine central banks also indicated that they were likely to issue a wholesale CBDC for use in financial markets in the following six years.

Since the last survey in May 2022, the worldwide CBDC programs have made progress, as noted in the BIS report. Major nations are actively looking at the idea of implementing digital versions of their fiat currencies, including India, the U.K., and the European Union. In especially in emerging nations, this transition towards CBDCs is considered as an opportunity to promote financial inclusion for unbanked people.

The Evolution of CBDCs and Their Relationship with Cryptocurrencies

According to the BIS poll, cross-border transfers and consumer purchases are the two most popular uses for stablecoins and other crypto assets presently being employed inside the crypto ecosystem. Despite the fact that cryptocurrencies have stimulated interest in CBDC research, the study indicates that central banks are hesitant about the broad adoption of cryptocurrencies for regular payments.

Notably, in light of the 2022 crypto meltdown, numerous central banks have reevaluated their CBDC plans. The digitalization of fiat currencies, such as the digital pounds in the United Kingdom and the digital euros in the European Union, may be required in the future, according to a growing body of opinion among monetary authorities. As demonstrated by the U.S. Treasury’s investigation into privacy-preserving methods, these efforts are complemented by a focus on protecting the confidentiality of digital transactions.

A number of nations have already started the process of introducing retail CBDCs. Nigeria, Jamaica, the Bahamas, and the Eastern Caribbean have all had success introducing their digital currencies to the general population. Nevertheless, questions about potential governmental surveillance have been highlighted by China’s ongoing trial initiatives for the digital yuan.

The global financial environment is prepared for a digital transition as central banks continue to research and create CBDCs. CBDCs are a topic of considerable attention and debate among governments and financial institutions worldwide because to their potential advantages, such as improved financial inclusion and safe digital transactions.