Key Insights:
A Bank for International Settlements (BIS) survey showed that 93% of central banks are interested in central bank digital currencies (CBDCs). It reflected the study carried out between October and December 2022 on 86 central banks and their increased demand for it.
The BIS said,
"A clear divergence has emerged: compared to last year, some central banks have become more likely to issue a retail CBDC within the next three years, while others indicated to be less likely to do so. The share of central banks likely to have a wholesale CBDC in the short term more than doubled."
This article will examine how the survey points to a more considerable discussion about this digital currency.
The report showed that most banks prefer retail CBDCs over wholesale due to the former's distinct attributes and possible extra features. Thus, there are predictions that 15 retail and nine wholesale CBDCs could be circulating by 2030.
Only four central banks possess their own digital version of their fiat currencies — Nigeria, Jamaica, The Bahamas, and the Eastern Caribbean. About 18% of banks signified that they could issue a retail CBDC later on.
Some central banks like Sveriges Riksbank, the Federal Reserve Bank of New York, and the Central Bank of Malaysia published results of their CBDC forays. Others, like the Hong Kong Monetary Authority, the Bank of England, and the Central Reserve Bank of Peru, published progress reports on possible CBDCs.
It showed that emerging and developing economies(EMDEs) were at the forefront of CBDC adoption. Their share in canvassing for retail (29%) and wholesale (16%) CBDCs dwarfs that of advanced economies (AEs) at 18% and 10%, respectively.
Almost 60% of the central banks said the emergence of stablecoins and crypto assets has accelerated their efforts. This has come against controversies that rocked the crypto ecosystem to its roots.
Consequently, many standard-setting bodies have made more effort to watch out for these crypto assets. Also, numerous financial institutions have set to work on CBDC projects such as regulatory efforts and platform development.
The stats don't lie. CBDCs are being considered by many countries — both developing (for financial inclusion) and advanced economies (for financial stability).
The fact that 93% of central banks are at work on their respective CBDCs is proof of crypto's penetration in the financial market. The report also shows interest in the demand for digital currencies increased from last year.
With the European Union, the UK, and other countries all considering the issuance of their respective CBDCs, other notable jurisdictions are bound to follow.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information but will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.