One hundred thirty nations exploring central bank digital currency, study finds.
A closely watched study shows that 130 countries comprise 98% of the world economy and are now looking into digital versions of their currencies, with almost half in advanced research, pilot, or launch stages.
The Atlantic Council, a think tank in the U.S., released a study on Wednesday that said major progress over the past six months meant that all G20 countries except for Argentina were now in one of these advanced stages.
Eleven countries, including a few in the Caribbean and Nigeria, have already started using central bank digital currencies (CBDCs). In China, 260 million people are now taking part in field tests that cover 200 different situations, from e-commerce to government stimulus payments.
India and Brazil, two other big rising economies, also plan to start using digital currencies next year. The European Central Bank is on track to start its digital euro test before a possible launch in 2028. More than 20 other countries will take big steps towards pilots this year.
In the United States, however, work on a digital dollar is only “moving forward” for a wholesale (bank-to-bank) version, while work on a retail version for the general public has “stalled,” according to a study by the Atlantic Council.
In March 2022, U.S. President Joe Biden told government officials to look at the risks and rewards of making the dollar digital.
The dollar is a heavyweight in the financial system, so anything the U.S. does could have huge effects worldwide. However, the Federal Reserve said in January that Congress, not it, should decide if a digital version of the dollar is made.
The global push for CBDCs comes when people are using cash less, and governments are trying to protect their ability to make money from bitcoin and “Big Tech” companies.
Another reason is the sanctions put on countries like Russia and Venezuela in recent years. Even long-time U.S. allies like Europe want to ensure they have an option for Visa, Mastercard, and Swift.
“Since Russia invaded Ukraine and the G7 responded with sanctions, wholesale CBDC developments have doubled,” the Atlantic Council said, adding that there are now 12 “cross-border” projects that involve more than one country.
It said that Sweden was still one of the most advanced countries in Europe with its CBDC test and that the Bank of England was working hard on a digital pound that could be used by the end of this decade.
This year, Australia, Thailand, South Korea, and Russia all plan to keep doing pilot tests.
Even though the number of people interested in CBDCs is rising, some countries that have started them, like Nigeria, haven’t responded well. Senegal and Ecuador have both stopped development work.
