Preliminary Findings on Central Bank Digital Currencies (CBDCs)
Preliminary outcomes from countries where CBDCs have been introduced are showing mixed results. Despite widespread exploration and a few launched projects, global adoption of CBDCs has not been achieved yet.
Main Breakdowns:
- 130 countries and currency unions are exploring CBDCs, with 11 nations having launched their digital currencies.
- 64 countries are in advanced exploration phases, including development, pilot, or launch.
- The European Central Bank (ECB) is piloting its digital euro, while other countries like Australia and Thailand continue pilot testing.
- The United States is forging ahead with wholesale CBDC development.
- The International Monetary Fund (IMF) is working on a global CBDC platform to promote financial inclusion and avoid potential fragmentation.
Hot Take:
Despite the potential benefits of CBDCs and the rapid exploration, countries are encountering challenges in achieving widespread adoption. In the case of Jamaica’s Jam-Dex, the digital currency aimed to promote financial inclusion but faced limited merchant adoption and low transaction volumes. The Bahamas’ sand dollar also had limited impact on financial inclusion and still accounted for a small percentage of currency in circulation. Nigeria’s eNaira, on the other hand, has shown significant growth and adoption due to successful demonetization efforts and government-led initiatives. These early outcomes highlight the importance of thoroughly assessing alternatives and potential impact before launching CBDC projects.
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