Nine Out of 10 Central Banks Are Planning to Launch CBDCs: BIS Survey
Nine out of 10 central banks globally are toying with the idea of launching a central bank digital currency (CBDCs), according to the latest survey by the Bank of International Settlements (BIS) — a global financial institution brought together by various central banks around the world. The survey, which involved 81 central banks, shows that 50 percent of central banks interested in launching a retail CBDC are currently already developing such products or are at some stage within the process of experimentation.
A paper released by the BIS Monetary and Economic Department said that 90 percent of 81 central banks surveyed from October to December 2021 were “engaged in some form of CBDC work,” with 26 percent running pilots on CBDCs and more than 60 percent doing experiments or proofs-of-concept related to a digital currency.
According to the BIS, the increase in interest around CBDCs — up from roughly 83 percent in 2020 — may have been driven by a shift to digital solutions amid the coronavirus pandemic as well as the growth in stablecoins and other cryptocurrencies.
The BIS study also highlights the fact that central banks are putting more effort into retail CBDCs. Nearly a fifth of central banks are working on a retail CBDC, which is twice the share of those for a wholesale CBDC. When it comes to the underlying architecture, more central banks are looking at those involved in the private sector.
More than 70 percent of central banks are considering a two-tiered model, where a CBDC is distributed to the public via private sector intermediaries. “Financial stability and enhancing cross-border payments are growing reasons for retail CBDCs,” the BIS said.
The paper cited the emergence of several CBDCs, beginning with the launch of the Bahamian Sand Dollar in October 2020 and Nigeria’s eNaira one year later as well as the development of the Eastern Caribbean DCash and China’s Digital Yuan in 2021. According to the BIS survey, more than 70 percent of central banks are also exploring CBDCs with “private sector collaboration and interoperability” for existing payment systems.
We are now on Telegram. Click here to join our channel (@TechiUpdate) and stay updated with the latest Technology headlines.
For all the latest Technology News Click Here