A survey conducted by the Bank for International Settlements (BIS) found that many central banks around the world are looking into launching a central bank digital currency, or CBDC.
In a paper published on Friday, the BIS Monetary and Economics Department said that 90% of the 81 central banks surveyed from October to December 2021 were “involved in some form of CBDC work,” with 26% piloting CBDCs and more than 60% conduct experiments or proof-of-concepts related to a digital currency. According to the BIS, the surge in interest in CBDCs – up from around 83% in 2020 – could be due to a shift towards digital solutions amid the COVID-19 pandemic, as well as the growth of stablecoins and other cryptocurrencies.
“Globally, more than two-thirds of central banks believe they are likely or potentially to issue retail CBDC in the short to medium term,” the BIS said. “Work on wholesale CBDCs is increasingly driven by reasons related to the efficiency of cross-border payments. Central banks view CBDCs as able to alleviate key pain points such as the limited operational hours of current payment systems and the length of current transaction chains.”
Nine out of 10 respondents #central banks are involved in some way in CBDC work, according to the BIS CPMI survey. The proportion developing or testing CBDC has nearly doubled year-over-year to 26%, while six in 10 are conducting experiments or proof-of-concept pic.twitter.com/7Tk2UkZpVv
— Bank for International Settlements (@BIS_org) May 6, 2022
The paper cited the emergence of multiple CBDCs, starting with the launch of the Bahamian sand dollar in October 2020 and Nigeria’s eNaira a year later, as well as the development of the eastern Caribbean DCash and the Chinese digital yuan in 2021. According to the BIS survey, more than 70% of Central banks are also exploring CBDCs with “private sector collaboration and interoperability” for existing payment systems.
“A well-designed CBDC could offer all sections of the population, including those less digitally savvy, access to a secure, instant and efficient digital means of payment,” said Bundesbank board member Burkhard Balz on Wednesday. “It would also be beneficial if CBDC could support offline payments. People would benefit from having a digital and low-cost cash alternative to choose from.”
Of the 81 countries surveyed – representing 76% of the world’s population – 25 were considered “advanced economies”, including the United States and Japan, a majority of which said that stablecoins tied to and backed by fiat currencies “a certain potential” would have means of payment. In contrast, more than 60% of respondents overall said cryptocurrencies were “trivial or not at all” for domestic payments, and about 40% answered the same for using crypto for cross-border payments.
Related: The BIS Innovation Hub works with the Fed to support analysis of digital assets
The BIS published a paper in April detailing how some central banks viewed CBDCs as a catalyst for innovation and development, while others expected the digital currency to work as a complement to existing systems. In March, the international body completed a pilot program for international settlements using CBDCs with the central banks of Australia, Malaysia, Singapore and South Africa.
https://cointelegraph.com/news/90-of-surveyed-central-banks-are-exploring-cbdcs-bis 90% of central banks surveyed are investigating CBDCs – BIS