A recent survey from the Bank for International Settlements (BIS) confirms the emerging trend of digital currencies backed by central banks. The publication reveals that 80% of the participants have declared that they are currently working on issuing their own cryptocurrency.
CBDCs: Coming From Most Banks
The survey was compiled by BIS at the end of 2019 and contains the answers from 66 central banks around the world. Twenty-one came from advanced economies and forty-five from emerging market economies (EMEs).
The study firmly concludes that 80% of all participants are in the process of creating their own central bank digital currency (CBDC). This showcases a 10% increase since last year. Additionally, 40% have already progressed from conceptual research to experiments, and 10% have developed pilot projects.
Interestingly enough, all central banks that are already testing their future CBDC come from an emerging market economy. The report explains it with the higher motivation coming from these countries:
“EMEs generally have stronger motivations than advanced economies to work on general-purpose CBDCs (which can act as a substitute or complement to banknotes). Domestic payments efficiency, payment safety, and financial inclusion were, on average, all considered “very important” in this respect for EMEs. For advanced economies, the only motivation ranked as very important was payment safety.”
When asked about the purpose of the digital currency, 15% said that their asset will focus on wholesale. Approximately 35% noted “general purpose,” and the others answered that they are aiming for both.
It’s worth pointing out that the General Manager of BIS, Agustin Carstens, recently urged for central banks to adopt CBDCs. He noted that they have to stay at the center of global payment systems as otherwise, they might risk falling behind.
New Central Banks Working On CBDCs
Information regarding new central banks working on potential CBDCs surfaces daily nowadays.
A collaboration between Hong Kong and Thailand recently informed about a joint digital currency. Both central banks confirmed the upcoming product called Project Inthanon-LionRock. Its main purpose will be to make cross border settlements more transparent, safer, and cheaper.
Furthermore, the central banks for Britain, the Eurozone, Japan, Sweden, and Switzerland also confirmed heading in the same direction. They will be reportedly creating a dedicated group to discuss potential use cases for their own digital currency.