Miles Au Yeung, Chief Markets, eCurrency
Sixty-three central banks responded to a survey on central bank digital currency (CBDC) conducted by Bank for International Settlement, published in January 2019. The respondents included advanced economies such as Canada, Euro area and Riksbank, as well as emerging market economies such as India, Indonesia and Zambia.
Forty-four of them responded that they were engaged in CBDC work, 38 of the central banks have focused on general purpose CBDC, whereas the other 6 of the 44 have focused only on wholesales CBDC.
Twenty-two of the respondents were doing hands-on proof of concepts to test technologies, and five of those 22 were running pilots.
The same twenty-two respondents saw themselves possible to very likely to issue general purpose CBDC by 2024. Nine of these as early as by 2021.
This is an encouraging sign for CBDC development as the world could be witnessing the beginning of the S-curve of innovation adoptions. Following the progress of these 22 central banks into digital currency will be an accelerating ramp up of the S-curve which indicates that 60 to 85 central banks are possible to very likely to issue CBDC in the next 10 years (Exhibit 1).
Exhibit 1 - Number of central banks possible to very likely to issue CBDC
The survey also found that emerging economies value domestic payments efficiency and financial inclusion most, while for advanced economies, payments safety and financial stability are the primary motivators for potential issuance of CBDC.
The full report is available here https://www.bis.org/publ/bppdf/bispap101.htm