A new study by the American Atlantic Council has revealed that a total of 130 countries are currently exploring central bank digital currencies (CBDCs), with almost half of them in advanced development, pilot or launch.
According to a Reuters report, the latest figures indicate that 98% of the global economy is working on CBDC development, which experts say could have far-reaching implications for the financial ecosystem. According to the report, all G20 countries except Argentina are approaching the launch of CBDCS with varying degrees of intensity.
A major theme of CBDC experimentation is the lack of uniformity among central banks. While some banking regulators are exploring the prospects for wholesale CBDCs, others are content to explore their retail iteration or both.
Some central banks, such as the Reserve Bank of India (RBI), have said they will take a slow and steady approach to CBDC development to avoid potential pitfalls. However, the Bank of Russia is moving towards the goal at a fast pace, relying on the development of CBDC in order to circumvent the sanctions.
The report notes a significant surge in global interest in CBDCs after Western powers imposed economic sanctions on Russia over its conflict with Ukraine. Central banks are particularly interested in using CBDCs to improve the current state of cross-border transactions, having completed several joint functionality studies.
Another factor driving the rapid development of CBDCs is the decline in cash usage since the advent of the COVID-19 pandemic and fears of the “cryptoization” of their local economy.
Several countries, such as Jamaica and Nigeria, have launched their own CBDCs, but while adoption rates continue to fluctuate, other countries are keen to launch their own versions. China, Russia, India and Brazil are moving closer to full-scale rollouts, with the European Central Bank (ECB) projecting a launch in 2028.
Bold attempts to unify designs
International organizations such as the International Monetary Fund (IMF), G7 and G20 have expressed their desire to standardize CBDC developments across the board. To achieve this goal, the IMF has published a manual that provides technical guidance for central banks wishing to learn about CBDCs.
“The handbook will be a compendium of CBDC knowledge and experience,” said Bo Li, IMF Deputy Managing Director. “This will form the basis for capacity development and hopefully help countries make the best decisions possible when taking the important step of developing and issuing their own CBDCs.”
In April, the G7 committed to helping developing countries lay the groundwork for developing retail CBDCs for uniform minimum operating standards.