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Research by the Bank for international Settlements into central bank thinking on the prospect of issuing bank-backed digital currencies (CBDC) shows growing momentum, with fully 90% of central banks dipping their toes into the water.
Both Covid-19 and the emergence of stablecoins and other cryptocurrencies have accelerated the work on CBDCs – especially in advanced economies, where central banks say that financial stability has increased in importance as a motivation for their CBDC involvement.
Globally, more than two thirds of central banks consider that they are likely to or might possibly issue a retail CBDC in either the short or medium term.
Compared with last year, the share of central banks currently developing a CBDC or running a pilot almost doubled from 14% to 26%. Also, 62% are conducting experiments or proofs-of-concept.
Behind the scenes, work is also progressing on the preparing the legal foundations for CBDC issuance.
Compared with last year, the share of central banks with a legal authority to issue a CBDC increased from 18% to 26%. In addition, about 10% of jurisdictions are currently changing their laws.
This is in line with the share of banks that said they would to be likely to issue a CBDC in the short term, the BIS notes.
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