cryptopolitan.com
A recent report has shown that a total of 134 countries including BRICS states or 98% of the global economy are exploring central bank digital currencies (CBDC) in their countries. Almost half of the countries are at advanced stages.
A CBDC is a virtual money backed and issued by the central bank. According to the report, pioneers of the initiative like the Bahamas, China, and Nigeria are beginning to see an uptick in usage, according to results of the study published Tuesday.
A total 44 countries are piloting the CBDCs
Data from US based Atlantic Council’s research shows that 65 countries including Australia, Brazil and India are now at advanced stages of exploring the CBDCs, including development stage, piloting or launch phase.
The study also revealed that all the G20 nations are now looking into CBDCs while 19 are at advanced stages of exploring the CBDCs. Of these, 13 are in pilot stage, including Japan, India, Brazil, Turkey, Australia, and Russia.
According to the thinktank, 44 countries are piloting the digital currencies.
This represents a growth of 22 percent on the 36 countries that were recorded a year ago and is part of a global push by authorities to respond to declining cash usage as well as a threat to their money-printing powers from the likes of bitcoin and “Big Tech.”
According to the study, 39 countries are at research stage including Argentina, Chile, Pakistan, and Zimbabwe.
Josh Lipsky and Ananya Kumar from the Atlantic Council indicated one of the most noticeable developments was the increase the Bahamas, Jamaica and Nigeria’s CBDCs. These are the only three countries that have officially launched the program in their countries, despite the vast global interest the CBDCs have garnered.
“There has been a narrative that the countries that have launched CBDCs have seen low or no usage, but in the last months we have seen a real uptake.”
Lipsky.
“My prediction is that the PBOC (China’s central bank) will be close to full launch a year from now,” added Lipsky.
According to Reuters, China is running the world’s largest pilot scheme. The Asian giant has seen the adoption of its prototype e-CNY almost quadruple to 7 trillion yuan or $987 billion of transactions in 17 provincial regions across sectors like education, healthcare, and tourism.
The US lags behind and more critical
According to a Reuters report, other big advances have been the European Central Bank’s launch of the a multi-year digital euro pilot. Although it has dragged feet on a digital dollar, the US joined the cross-border CBDC project Agora with six other central banks.
The US however still lags behind almost every other leading bank, but Lipsky highlighted that it is one of the countries where privacy and other concerns about CBDCs are most vocal.
The US House of Representatives passed a bill in May to stop the direct issuance of a “retail” CBDC, the ones used by the public. This has remained a live issue in the election campaigns between Kamala Harris and Donald Trump, as the Senate has not acted on it yet.
According to Reuters, since Russia’s invasion of Ukraine and the G7 sanctions response, “wholesale” bank-to-bank only CBDC projects have more than doubled to 13.
Codenamed mBridge, it is the fastest growing CBDC project which connects CBDCs from China, Hong Kong, Saudi Arabia, Thailand, and UAE. mBridge is expected to expand to other countries this year, as per Atlantic Council’s projections.
While Russia might not be one of them, its digital pilot means it is now accepted in the Moscow metro and in some petrol stations, according to Reuters.
Iran is also reportedly working on a digital trial.