Twenty-four central banks will have digital currencies by 2030 - BIS survey

Signature Bank

10/07/2023 10:00

By Karin Strohecker
       LONDON, July 10 (Reuters) - Some two dozen central banks
across emerging and advanced economies are expected to have
digital currencies in circulation by the end of the decade, the
Bank for International Settlements (BIS) found in a survey
published on Monday. 
    Central banks around the globe have been studying and
working on digital versions of their currencies for retail use
to avoid leaving digital payments to the private sector amid an
accelerating decline of cash. Some are also looking at wholesale
versions for transactions between financial institutions.
    Most of the new Central Bank Digital Currencies (CBDCs) will
emerge in the retail space, where eleven central banks could
join peers in the Bahamas, the Eastern Caribbean, Jamaica and
Nigeria which already run live digital retail currencies, the
BIS found in its survey of 86 central banks conducted late 2022.
    On the wholesale side, which in future could allow financial
institutions to access new functionalities thanks to
tokenisation, nine central banks could launch CBDCs, the BIS
said. 
    "Enhancing cross-border payments is among the key drivers of
central banks' work on wholesale CBDCs," the authors of the
report wrote. 
    The Swiss National Bank said in late June it would issue a
wholesale CBDC on Switzerland's digital exchange as part of a
pilot, while the European Central Bank is on track to begin its
digital euro pilot ahead of a possible launch in 2028. Pilot
testing in China now reaches 260 million people and two other
big emerging economies, India and Brazil, plan to launch digital
currencies next year. 
    The BIS also said that the share of central banks in its
survey engaged in some form of CBDC had risen to 93%, with 60%
saying the emergence of stablecoins and other cryptoassets had
accelerated their work. 
    The past 18 months have seen turmoil in the crytpo market,
including the failure of TerraUSD, an unbacked stablecoin, in
May 2022, the collapse of crytpo exchange FTX in November and
the bankruptcy of banks such as Silicon Valley Bank and
Signature Bank, which serviced crypto providers.
    While these developments had no major impact on traditional
financial markets, they led to sell-offs in multiple
cryptoassets. 
    Almost 40% of respondents indicated their central bank or
other institutions in their jurisdiction recently carried out a
study on the usage of stablecoins and other cryptoassets among
consumers or businesses, the survey found.
    "If widely used for payments, cryptoassets including
stablecoins may constitute a threat to financial stability," the
BIS report said.

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Central Banks working on CBDCs    https://tmsnrt.rs/3O5kPJR
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 (Reporting by Karin Strohecker
Editing by Mark Potter)
 ((karin.strohecker@thomsonreuters.com; +442075427262; Reuters
Messaging: karin.strohecker.reuters.com@reuters.net))