(24 June 2024 – Switzerland) 94 percent of central banks surveyed by the Bank for International Settlements (BIS) are exploring use cases for a central bank digital currency (CBDC).
Central banks are proceeding at their own speed, taking diverse approaches and considering different design features. Over the course of 2023, there has been a sharp uptick in experiments and pilots with wholesale CBDCs mainly in advanced economies (AEs), but various emerging market and developing economies (EMDE) also stepped up their wholesale CBDC work. For example Saudi Arabia has joined a Chinese-led CBDC cross-border trial in what has been billed as yet another seismic shift away from global oil trade denominated in US dollars.
China is also conducting the world's largest domestic CBDC pilot which now encompasses 260 million people and covers 200 scenarios from eCommerce to government stimulus payments.
Overall, the likelihood that central banks will issue a wholesale CBDC within the next six years now exceeds the likelihood that they will issue a retail CBDC. 135 countries and currency unions, representing 98 percent of global GDP, are exploring CBDCs. But the new technologies they use makes cross-border movement both technically challenging and politically sensitive. Central banks further enhanced their engagement with stakeholders to inform CBDC design given many CBDC features are still undecided with interoperability and programmability often considered for wholesale CBDCs.
“CBDCs can foster innovation and preserve the best elements of the current system as it evolves. Central banks must answer difficult and practical questions about how to offer safe and neutral currency with interoperable systems that harness new technology and serve the public” said BIS Innovation Hub Head Benoît Cœuré in response to earlier reporting on retail CBDC viability.
“Central banks have a responsibility to ensure that citizens have access to the safest form of money – central bank money — in the digital age. Policy makers are enhancing their domestic projects with international cooperation, sharing ideas on the best technological innovations to provide fast, easy and secure means of payment in the 21st century” commented ECB president Christine Lagarde.
“This collaborative input from a group of central banks will help make sure that innovation in an increasingly digital world, the role the private sector plays in any CBDC system to help it meet future payments needs, and how the financial system might evolve are carefully evaluated” said Bank of England Deputy Governor for Financial Stability Sir Jon Cunliffe.