BIS: 90% of central banks surveyed are exploring CBDC

A number of central banks around the world are considering launching a central bank digital currency (CBDC), according to a survey conducted by the Bank for International Settlements (BIS).

In a report published on Friday, the Bank for International Settlements' Monetary and Economics division said that of 81 central banks surveyed between October and December 2021, 90% "engaged in some form of CBDC work," with 26% of central banks are conducting CBDC pilots, and more than 60% of central banks are conducting experiments or proof-of-concepts related to digital currencies. According to the BIS, the increased interest around CBDCs — an increase from roughly 83 percent in 2020 — may be due to the shift to digital solutions amid the COVID-19 pandemic, as well as the growth of stablecoins and other cryptocurrencies.

“Globally, more than two-thirds of central banks believe they are likely to issue retail CBDCs in the short to medium term. Research on wholesale CBDCs is increasingly driven by reasons related to the efficiency of cross-border payments,” the BIS said. .The central bank believes that CBDC can alleviate key pain points, such as the limited operating time of the current payment system and the length of the current transaction chain.”

The document mentions several CBDCs that have emerged, starting with the Bahamian sand dollar launched in October 2020, Nigeria's eNaira a year later, and the Eastern Caribbean DCash and China's digital yuan developed in 2021. According to the BIS survey, more than 70% of central banks are still exploring the cooperation between CBDC and the private sector and the interoperability with existing payment systems.

Burkhard Balz, member of the executive board of Deutsche Bundesbank, said on Wednesday: "If designed well, CBDC can provide safe, instant and efficient digital payment methods for all groups of people, including social groups that are less digitally savvy. If CBDC can support offline payments , which will also be beneficial. People will benefit from a cost-effective digital cash option.”

Of the 81 countries surveyed (76 percent of the world's population), 25 are considered to have "advanced economies," including the U.S. and Japan, and most of them said fiat-pegged and backed fiat currencies Stablecoins have "some potential" as a means of payment. In contrast, more than 60 percent of central banks surveyed said the use of cryptocurrencies for domestic payments is “insignificant or of no use,” and about 40 percent said the same about their use for cross-border payments. response.

The BIS released a document in April detailing how some central banks see CBDCs as a catalyst for innovation and development, while others envision the digital currency as a complement to existing systems. In March, the international institution completed a pilot project using CBDC for international settlements with the central banks of Australia, Malaysia, Singapore and South Africa.

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