Key Takeaways
- The Bank for International Settlements (BIS) survey reveals that 93% of central banks are actively engaged in CBDC work, highlighting the global momentum behind digital currencies.
- Major jurisdictions like India, the U.K., and the European Union are seriously exploring the issuance of digital versions of their fiat currencies, signaling the transformative potential of CBDCs on a global scale.
- Collaboration between central banks is essential to establish a robust framework for cross-border CBDC transactions.
A recent survey conducted by the Bank for International Settlements (BIS) has shed light on the increasing significance of central bank digital currencies (CBDC) and cryptocurrencies. The survey, which garnered responses from central banks worldwide, highlights several key findings that underscore the momentum behind the adoption of CBDCs.
One of the notable findings from the survey suggests that there could be a surge in the number of retail CBDCs in circulation by the end of the decade. This projection indicates a growing trend among central banks to issue digital versions of their fiat currencies for use by the general public.
Furthermore, the survey reveals a strong likelihood of central banks exploring the issuance of CBDCs for wholesale use. This development could potentially revolutionize financial markets and enhance the efficiency of interbank transactions.
The growing interest in CBDCs stems from several factors. Firstly, CBDCs have the potential to improve financial inclusion by providing banking services to the unbanked population. By leveraging digital technologies, central banks can reach previously underserved communities and empower individuals with access to financial services. Note that previously CBDC framework has also been released.
Additionally, CBDCs offer compatibility with existing domestic payment methods, making the transition to digital currencies seamless for consumers. This integration ensures that individuals can continue using familiar payment systems while enjoying the benefits of CBDC.
Significant progress has been made in CBDC work since the previous year. Central banks have accelerated their efforts in research, development, and pilot projects. This momentum signals a growing realization of the transformative power CBDCs hold.
Collaboration between central banks is essential to establish a robust framework for cross-border CBDC transactions. Central banks must work together to define common standards, protocols, and technical specifications that enable interoperability.
This collaboration can facilitate the development of cross-border payment networks, enabling secure and instant transfers between different CBDCs. By aligning their efforts, central banks can avoid fragmentation and create a unified global CBDC ecosystem.
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