If BIS calculations are correct, by 2030, there could be 15 retail and nine wholesale CBDCs.
The Bank for International Settlements (BIS), an international financial institution, has shared a report suggesting that by 2030, the world could witness the circulation of up to 24 CBDCs, giving the financial landscape a whole new dimension.
This investigation, conducted by BIS, surveyed 86 central banks from October to December 2022, aiming to understand the extent of their engagement with CBDCs. Their queries ranged from the nature of the CBDC - retail or wholesale, to the progress of the project and the underlying reasons driving their interest in the technology.
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As the study reveals, CBDCs caught the attention of a staggering majority of the world's central banks - 93%, to be precise. More than half of these are already delving into experiments or have set the wheels in motion for a CBDC pilot.
Interestingly, it seems that retail CBDC projects are catching more momentum, with nearly a quarter of all central banks already launching their pilots, while their wholesale counterparts lag slightly behind.
The global map of CBDC adoption highlights an impressive trend. The nations within emerging markets and developing economies are leading the charge. Their involvement in retail (29%) and wholesale (16%) CBDC pilots almost doubles that of advanced economies, at 18% and 10%, respectively.
These CBDC initiatives across developing and advanced economies generally share common goals, such as ensuring financial stability and enhancing the efficiency of cross-border payments. However, it's important to note that developing countries often lean towards these projects as a means to drive financial inclusion.
The potential upshot of CBDCs over the next few years is intriguing. The BIS survey indicates an increase in the share of central banks likely to issue a retail CBDC within the next three years, growing from 15% to 18% in 2022. However, a majority of central banks - 68% to be exact, remain apprehensive about issuing a retail CBDC in the near future.
Only four countries, the Bahamas, Eastern Caribbean, Jamaica, and Nigeria, boast active CBDCs. However, if the responses from the central bankers' are to be believed, the world could witness 15 retail and nine wholesale CBDCs taking shape by the end of this decade.
As central banks worldwide continue to study and test CBDCs, it's clear we're stepping towards a more digital-focused monetary system. The next decade could witness the start of a new chapter in global economics, shaped by the rise of CBDCs.
