Countries accelerate development of digital currencies
Central bank digital currencies are gaining traction globally, with notable uptake in the Bahamas, Nigeria, and China, as countries respond to the decline of cash usage and rising digital trends.
A growing number of countries, representing 98% of the global economy, are exploring digital versions of their currencies, with almost half of them at an advanced stage of development. Countries like China, the Bahamas, and Nigeria have already seen a noticeable increase in the usage of their central bank digital currencies (CBDCs).
Research by the Atlantic Council reveals that all G20 nations are now investigating CBDCs, with 44 countries currently piloting them, up from 36 last year. Authorities are accelerating these efforts in response to decreasing cash usage and the potential threat from cryptocurrencies like Bitcoin and big tech companies.
Notable growth has been observed in the CBDCs of the Bahamas, Jamaica, and Nigeria, while China’s digital yuan (e-CNY) has seen its transaction value almost quadruple to 7 trillion yuan ($987 billion). The European Central Bank has also launched a multi-year digital euro pilot, while the US, despite being slower to act, has recently joined a cross-border CBDC project with six other central banks.
Meanwhile, the United States is grappling with privacy concerns over CBDCs. Although a bill prohibiting a ‘retail’ CBDC has been passed by the US House of Representatives, the issue remains prominent in the country’s political discourse. Elsewhere, Russia’s digital rouble pilot has expanded to Moscow’s metro, and Iran is working on a digital rial.
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