Daily Management Review

Study Reveals That 130 Nations Are Experimenting With Central Bank Digital Currencies


According to a widely watched research, 130 nations, or 98% of the world's economies, are currently studying digital versions of their national currencies, with over half in advanced development, pilot, or launch stages.
According to analysis by the American think tank Atlantic Council released on Wednesday, considerable advancement over the previous six months meant that all G20 nations with the exception of Argentina were now in one of those advanced stages.
The so-called central bank digital currencies (CBDCs) have already been introduced in eleven nations, including Nigeria and many Caribbean nations. Pilot testing in China has reached 260 million people and spans 200 use cases, ranging from e-commerce to government stimulus payments.
Brazil and India, two additional significant growing economies, also intend to introduce digital currencies in 2019. Over 20 other nations will also make substantial progress towards trials this year, including the European Central Bank, which is on schedule to start its digital euro pilot ahead of a potential launch in 2028.
According to research by the Atlantic Council, however, development of a digital dollar in the United States has "stalled" for a retail version intended for use by the general public but is only "moving forward" for a wholesale (bank-to-bank) version.
President of the United States Joe Biden gave officials a deadline of March 2022 to evaluate the advantages and disadvantages of establishing a digital currency.
Any American decision might have significant global repercussions due to the dollar's dominant position in the financial system, but the Federal Reserve stated in January that Congress should make that decision rather than it.
The global push for CBDCs comes as physical currency use declines and governments attempt to counter the danger that bitcoin and 'Big Tech' companies pose to their ability to generate money.
Another factor driving the need for an alternative to the Visa, Mastercard, and Swift payment networks is the recent sanctions placed on countries like Russia and Venezuela, which have long been U.S. allies.
"Since Russia’s invasion of Ukraine and the G7 sanctions response, wholesale CBDC developments have doubled," the Atlantic Council said, adding that there were now 12 multi-country "cross-border" projects being worked on.
With its CBDC trial, Sweden was noted as one of Europe's most advanced nations, while the Bank of England continued to work on a potential digital pound that might be in use by the middle of this decade.
Additionally, this year, pilot testing is planned to continue in Australia, Thailand, South Korea, and Russia.
Despite the rising interest in CBDCs, several nations that have introduced them, like Nigeria, have found a dismal uptake, and Senegal and Ecuador have also stopped development activities.