Progress on central bank digital currencies has been relatively slow. But a flurry of tests near the end of the year suggest CBDC initiatives are improving their pace, as central banks try to determine the impact on traditional banking and payment systems.
About a dozen CBDCs have launched, according to a tracker from the Atlantic Council, which adds 17 are in pilot and 72 are in research and development. Eighty percent of central banks are considering a CBDC or have already launched one, according to PwC. There’s a mix of motivating factors, such as improving cross-border payments, mitigating financial crimes and improving financial inclusion, reports PwC. Mounting risks from other forms of digital currency, such as volatility in cryptocurrency, are also pushing CBDC projects.
“A well-designed CBDC can help provide a real-time view of risks and currency outflows to help implement specific and targeted measures to prevent financial contagions from spreading further in the event of a crisis,” said Gilbert Verdian, founder and CEO of Quant, a London-based blockchain firm.
Here are some CBDC projects that were underway near the start of 2023, with results expected to inform a path forward in these locations in the year ahead.
