Global Surge in Central Bank Digital Currencies: 134 Nations Explore Digital Currency Solutions
In a significant development for the financial world, a new report by the Atlantic Council reveals that 134 countries, representing a staggering 98% of the global economy, are actively exploring central bank digital currencies (CBDCs). This marks a substantial increase from just 35 nations in 2020, highlighting the rapid adoption of digital currency solutions worldwide.
As of now, 66 countries have made notable progress in their CBDC initiatives. Among them, the Bahamas, Jamaica, and Nigeria have already launched their digital currencies and are working on expanding their use domestically. In addition, 44 nations, including Australia, Indonesia, Singapore, and Malaysia, are running pilot programs for CBDCs, up from 36 last year. This uptick reflects the global trend towards addressing the decline in cash usage and competing with cryptocurrencies such as Bitcoin.
China continues to lead the global CBDC effort with its digital yuan, known as e-CNY. As of June 2024, the transaction volume of e-CNY has reached $986 billion across 17 regions, a dramatic increase from the $253 billion recorded a year earlier. This expansion is transforming various sectors, including education, healthcare, and tourism, underscoring China's prominent role in the digital currency arena.
The BRICS nations—Brazil, Russia, India, China, and South Africa—are also advancing their CBDC projects. This collective effort aligns with BRICS' broader goal of developing alternatives to the U.S. dollar-based payment systems.
In the realm of cross-border CBDC initiatives, there has been a notable increase, with the number of such projects more than doubling to 13. Project mBridge, which links financial institutions across China, Thailand, the UAE, Hong Kong, and Saudi Arabia, is particularly prominent and is expected to expand further. Additionally, the U.S. has joined the Project Agorá initiative, a cross-border wholesale CBDC project involving six major central banks. Although the U.S. House of Representatives recently passed a bill prohibiting the direct issuance of a retail CBDC, the legislation is still pending review by the Senate. The debate over CBDCs continues to be a hot topic in the ongoing U.S. presidential campaign.
Earlier this year, the World Economic Forum reported that more than 98% of central banks globally are engaged in CBDC research, development, or deployment. This widespread involvement reflects a global commitment to enhancing the accessibility and functionality of central bank money in the digital age.
