 | Get all the essential market news and expert opinions in one place with our daily newsletter. Receive a comprehensive recap of the day's top stories directly to your inbox. Sign up here! |
(Kitco News) -
The world could see 24 central bank digital currencies (CBDC) in circulation by 2030, according to the latest survey by the Bank for International Settlements (BIS) published Monday.
“Over the course of 2022, the share of central banks engaged in some form of central bank digital currency (CBDC) work rose further, to 93%, and their uncertainty about short-term CBDC issuance is fading,” the authors wrote. “The survey suggests that there could be 15 retail and nine wholesale CBDCs publicly circulating in 2030.”
The sixth annual BIS survey on central bank digital currencies and crypto was conducted between October and December 2022. 86 central banks responded to questions about their work on retail, wholesale or both types of CBDC, including their goals and their level of advancement. The survey also asked central banks about their views on the use of stablecoins and other cryptoassets in their jurisdictions.
While the Bahamas, the Eastern Caribbean, Jamaica and Nigeria remain the only countries to issue a retail CBDC and none were launched in 2022, the survey’s authors say there are probably more to come, as “18% of central banks indicated in the survey that they are likely to issue a retail CBDC in the near term.”
The jurisdictions of the 86 participating central banks “represent 82% of the world’s population and 94% of global economic output,” they wrote, with 28 representing advanced economies (AE) and 58 from emerging market and developing economies (EMDE).
The share of central banks engaged in some form of CBDC research and development rose to 93% in 2022, up from 90% the previous year. “Importantly, central banks’ CBDC work has made further progress,” they wrote. “More than half of central banks are conducting concrete experiments or working on a CBDC pilot.”
The survey distinguished between four stages: Research/study, which is exploratory work such as use cases, impact and feasibility studies without technical development; Experiments/proofs of concept, which is early testing of CBDCs in a controlled and internal environment; Developing or running a pilot, which is testing a prototype in the real world with a restricted number of external participants; and Live, where a CBDC has been issued for widespread use.
The survey results show that EMDEs are more advanced than AEs in their CBDC work. “All the current live CBDCs are issued in EMDE jurisdictions,” they wrote. “Moreover, the share of EMDE central banks piloting a retail (29%) and wholesale (16%) CBDC is almost twice as high as in AEs (18% and 10%, respectively).”
Regarding other digital currencies, the survey notes that “stablecoins and other cryptoassets are rarely used for payments outside the crypto ecosystem,” but 60% of responding central banks said they have “stepped up their CBDC work in response to the emergence of cryptoassets.”
The BIS report aslo shows that central manks are increasingly monitoring the use of stablecoins and other cryptocurrencies in their respective economies.
The survey also noted significant differences in stablecoin usage between AEs and EMDEs. “Stablecoins seem to play a relatively larger role in remittances in AEs (36%) than in EMDEs (24%),” they noted. “Also, AE central banks (7%) reported a larger use of stablecoins for cross-border wholesale in their jurisdictions than did EMDE central banks (4%).”
The authors concluded by saying that if and when they are issued, retail CBDCs are expected to complement and coexist with other domestic payment methods. “Most jurisdictions either have or plan to launch an FPS [fast payment system] and believe that there may be value in having both an FPS and a retail CBDC,” they wrote. “This underlines the importance of ensuring interoperability with existing payment systems to be sure that payers and payees can seamlessly make and receive payments, regardless of the payment method or service provider.”
