Central Banks and CBDC Rollouts: A Mixed Outlook

CBDC Adoption: Progress and Challenges

According to a recent survey, nearly a third of central banks have delayed their Central Bank Digital Currency (CBDC) rollouts, while 75% still plan to issue one. The survey, conducted by the Official Monetary and Financial Institutions Forum and Giesecke+Devrient, reveals that 67% of central banks haven’t changed their stance on CBDCs, despite the delays. However, 15% are now less inclined to issue a CBDC, up from 0% in 2022.

Privacy Concerns and Motivations

Privacy remains a significant concern for CBDCs, with critics arguing that they could enable governments to monitor transactions. Despite these concerns, “preserving central bank monetary sovereignty” is a key motivation for those pushing ahead with CBDCs. As Wolfram Seidemann, chief executive of G+D Currency Technology, notes:

CBDCs hold significant potential for advancing the digital economy. By offering a public infrastructure, central banks can pave the way for innovative financial products and services, while reducing fragmentation in the financial system.

Adoption Challenges

Adoption, however, remains an issue for CBDCs. In countries like Jamaica, Nigeria, and China, CBDCs have struggled to gain traction. The survey found that for 55% of emerging market central banks, low user adoption is the biggest concern.

Global CBDC Landscape

As of September 2024, 134 countries were exploring CBDCs in some way, up from just 35 in May 2020. More than 65 countries, including India, Australia, and Brazil, are in the later stages of development, testing, or rollout. Every G20 nation is now exploring a CBDC, and 19 are in advanced stages.

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