A recent survey conducted by the Bank for International Settlements (BIS) has revealed that 94% of central banks globally are currently exploring central bank digital currencies (CBDCs). This marks a significant increase in experiments and pilots, particularly with wholesale CBDCs.
The findings, detailed in a report titled “Embracing Diversity, Advancing Together,” show that central banks are proceeding cautiously and taking varied approaches to CBDC implementation and design. Motivations for exploring CBDCs include preserving the role of central bank money in the face of privately issued digital currencies, improving domestic payment efficiency, promoting financial inclusion, and enhancing cross-border payment systems.
The survey, which gathered responses from 86 central banks, indicates a growing interest in wholesale CBDC projects, especially in advanced economies. Central banks are focusing on refining CBDC designs, with an emphasis on features like interoperability and programmability for wholesale CBDCs. Retail CBDCs are also being considered, with features such as holding limits, interoperability with existing payment systems, offline transaction capabilities, and zero remuneration.
Notably, differences in design preferences have been observed between advanced economies and emerging markets, with the latter showing a stronger inclination towards distributed ledger technology (DLT) and transaction limits. The BIS stresses the importance of global cooperation to ensure a secure and efficient payment system as jurisdictions move forward with varied approaches at different paces.
The survey also explored the use of stablecoins and other digital assets, finding that stablecoins are predominantly used within the crypto ecosystem and are rarely utilized for mainstream payments. Despite the stablecoin market capitalization exceeding $161 billion, these tokens represent only 6% of the total crypto market.
Central banks have identified stablecoins as primarily being used for cryptocurrency trading or within decentralized finance (DeFi) platforms, with limited adoption for everyday payment purposes. While stablecoins are utilized by niche groups for remittances and retail payments, they are not widely embraced by the general public.
Regulatory efforts are underway to address concerns about stablecoins potentially disrupting financial stability and payment systems. Key regulatory objectives include investor and consumer protection, ensuring financial stability, and combating illicit activities.
