Nine out of ten central banks around the world are exploring central bank digital currencies, according to a survey conducted by the Bank for International Settlements (BIS). The survey also found that more central banks are developing or testing retail CBDCs or digital currencies intended for use by consumers than wholesale CBDCs intended for use by banks. The BIS is owned by 63 central banks and accounts for 95% of total global GDP.
The report released Friday by the Bank for International Settlements presents the results of a survey of 81 central banks conducted in autumn 2021. Participating central banks cover nearly 76 percent of the world’s population and 94 percent of global economic output. The 81 banks include: 25 central banks from developed countries and 56 central banks from developing countries. The survey explores the level of involvement of banks in CBDC-related work, as well as their motivations and intentions for issuing CBDC. Fifty-six of these surveyed banks participated in the 2020 survey, of which 41 are participating for the fourth time. This allows the BIS to assess how their views and participation in the issuance of a CBDC have changed over time.
Over the past year, the percentage of central banks actively engaged in some form of CBDC-related work has grown to 90%. The survey data shows that central banks are particularly interested in CBDCs in the retail sector: all central banks working on CBDCs either focus on wholesale and retail, or only CBDCs in retail. A growing number of central banks are in the later stages of exploring community development centres. The percentage of central banks currently developing community development centres or conducting pilots has nearly doubled compared to last year, from 14% to 26%. Additionally, 62% of banks are conducting experiments or proof-of-concepts. The work of retail central banks is at a more advanced stage than that of wholesale central banks. Nearly one-fifth of central banks are developing or testing retail-based community development centres, double the share of central banks building or piloting wholesale-based community development centres.
The report concluded that most central banks surveyed are exploring community development centers, and more than half are developing or conducting specific experiments. In particular, CBDC-related work in the retail industry has entered a more advanced stage . Two-thirds of central banks are considering issuing retail CBDCs in the future, joining the Bahamas, China, Eastern Caribbean and Nigeria that have already issued CBDCs.
As the issuance of CBDC is gradually moving from research to practical implementation globally, the shape of the retail CBDC ecosystem in the future may become very clear. Many central banks are exploring interoperability with existing payment systems and are considering bringing the private sector on board. Public and private sector collaboration, coupled with interoperability, will help build an ecosystem where CBDCs coexist with other means of payment.
Currently, central banks generally believe that the use of stablecoins is limited to niche groups or specific use cases. However, quite a few believe that stablecoins have the potential to become a widely used payment method. The survey shows how the emergence of stablecoins and other cryptocurrencies has accelerated global efforts to issue CBDCs.
The issue of cross-border payment efficiency has been raised several times over the past year, especially given the central bank’s work in issuing wholesale CBDCs. A multi-year G20 plan is underway to make cross-border payments faster, cheaper, more transparent and more convenient. An industry source said: “CBDC can play an important role in this, especially in terms of shortening the current transaction chain and providing longer operating time.” CPMI will cooperate with BISIH, IMF and the World Bank, in 2022 A report to the G20 in July will further analyze options for interconnecting countries’ CBDCs to improve cross-border payments.
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