Progress on central bank digital currencies has been relatively slow. But a flurry of tests near the end of the year suggests that CBDC initiatives are picking up pace as central banks try to determine the impact on traditional banking and payment systems.
About a dozen CBDCs have been launched, according to the tracker Atlantic Council, which adds that 17 are in the pilot phase and 72 are in research and development. 80 percent of central banks are considering a CBDC or have already launched one, according to PwC. There is a mix of driving factors, such as improving cross-border payments, mitigating financial crime and improving financial inclusion, PwC said. The growing risks of other forms of digital currency, such as cryptocurrency volatility, are also driving CBDC projects.
“A well-designed CBDC can help provide real-time insight into risks and currency outflows to help implement specific and targeted measures to prevent further spread of financial contagion in the event of a crisis,” said Gilbert Verdian, founder and CEO of Quant. , a London-based blockchain company.
Here are some of the CBDC projects that were underway as of early 2023, the results of which are expected to indicate a path forward in these locations over the coming year.