By 2023, more than 20 digital tokens controlled by central banks will likely be in use worldwide.
A study by the Bank for International Settlements (BIS) that came out last week found that more and more central banks worldwide are working on digital versions of their national currencies.
A central bank digital currency (CBDC) is a digital payment tool based on the national unit of account and controlled by a central bank. There are currently two types: retail, which people and businesses use daily, and wholesale, which is used for trade between banks.
According to the BIS, 79 of the 86 central banks that were asked said they were looking into making some CBDC. Over half of the national officials said they were already doing “concrete experiments” with digital currencies or working on test versions.
The study found that most central banks think a retail and wholesale CBDC could be helpful, and the BIS believes there will be at least 15 retail and nine wholesale CBDCs in general circulation worldwide by 2030.
The poll found that more banks are getting closer to issuing CBDCs within the next three years. The number of banks that plan to publish wholesale CBDCs has grown from 15% to 16% since last year, and the number of banks that plan to issue retail CBDCs has increased from 15% to 18%.
People who don’t like CBDCs have been asking questions about them, especially about how they are regulated and how private their deals are.
On the other hand, analysts say that standard financial institutions are getting more and more excited about entering the digital market.
“According to the BIS poll, central banks are more optimistic than ever about CBDCs. There are many new ways to use blockchain, and leaders in countries as different as Sri Lanka, Singapore, and Switzerland are starting to see the benefits. Gilbert Verdian, founder and CEO of Quant, a technology partner on the Bank of England’s CBDC project, told a FinTech news outlet, “These include more efficient payments, financial inclusion, and faster implementation of monetary policy.” Verdian was responding to the story.
“A well-made CBDC could be a significant driver of new ideas. Businesses and people would be able to automate complicated and time-consuming tasks and turn reasoning into money, said Verdian.
BIS says that The Bahamas, the Eastern Caribbean, Jamaica, and Nigeria are the four central banks that have issued a private CBDC.