05 Apr 2022 Anthony Lehrman
More Than 80% Of Central Banks Are Jumping On The CBDC Train
A study from accounting firm PwC revealed that over 80% of central banks worldwide are becoming increasingly aware of the possible opportunities and risks in launching a CBDC project. The second annual Global CBDC Index report by PwC measures a central bank‘s level of maturity in deploying its own digital currency.
The report, according to Haydn Jones, blockchain and crypto specialist at PwC UK, showcased that “over 80% of central banks are considering launching a CBDC or have already done so”.
The PwC report made an in-depth analysis and ranked both retail CBDCs, ones that are issued for use by the general public, and wholesale CBDCs for use by financial institutions holding with the central bank.
It turns out that retail CBDC projects have reached a greater level of maturity when comparing them with wholesale CBDCs. For instance, Nigeria’s “eNaira” ranked the highest in terms of developments across both the retail and wholesale categories, reaching a score of 95.
The retail category also includes the first-ever national CBDC – the Bahamas’ Sand Dollar project. Countries like Jamaica and Thailand also made it to the list, with the Jamaican Jam-Dex CBDC is scheduled to launch in 2022, while the Thai CBDC is in a testing phase, announced in August 2021.
Thailand also happens to be one of the biggest innovators in the wholesale category for its mBridge joint CBDC project, in development with Hong Kong. The mBridge project aims for cross-border payments, with Singapore and France also showing signs of continued exploration of CBDC projects.
“Countries are at differing levels of maturity with CBDCs and each country has different motivating factors. Increasing financial inclusion, facilitating cross-border payments, and controlling financial crime are all factors that come into play. We expect CBDC research, testing, and implementation will intensify in 2022”, Jones noted, emphasizing on the current level of maturity and preparedness for countries to develop CBDC projects.
The PwC report also made a detailed overview of the top ten USD-pegged stablecoins by market capitalization, as well as their core functions and the backing mechanisms involved in them.
The research paper also stressed that stablecoins have become an “integral part of the crypto ecosystem” and it is “impossible” for any fund or institution “to be active in crypto without using stablecoins.”
“Digital currencies could prove to be a huge boost, opening up vast new markets and creating sources of business that could last for decades. As CBDC adoption looks closer to becoming the new global norm, it’s vital the UK continues to ensure that we remain future-focused and alive to change, whatever that may look like”, Jones concluded.
Is China’s project stalling?
Despite more and more countries are onboarding the CBDC train, China and its People’s Bank of China (PBOC) is still by far the leading nation in CBDC development. It turns out that the Chinese digital yuan mobile application, the e-CNY wallet app, quickly became one of the fastest-growing apps in the country, being downloaded by almost one-fifth of the Chinese population and moving 87.5-billion-yuan (US $13.78 billion) worth of transactions using the digital fiat currency in 2021.
However, the pilot program is fully operational in just several provinces, including Shenzhen, Suzhou, Xiong’an, Chengdu, Shanghai, Hainan, Changsha, Xi’an, Qingdao, Dalian, and the closed-loop of the 2022 Winter Olympic Games. Now, PBoC is planning to expand its trials in Tianjin, Chongqing, Guangzhou, Fuzhou, Xiamen, Hangzhou, Ningbo, Wenzhou, Huzhou, Shaoxing, and Jinhua.
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