80% of Central Banks Are Considering Launching a CBDC

At least 80 percent of the world’s banks are considering launching a central bank digital currency (CBDC), according to a report from accounting firm PwC conducted in accordance with the firm’s annual index of CBDCs and stablecoins.

The index evaluates the current stage of CBDC projects in each country and the level of maturity of their respective central banks in developing a national digital currency.

The report, led by PwC’s blockchain specialist Haydn Jones, also taps into the role of stablecoins, calling them an “emerging complement to existing payment ecosystems”.

Other analysts have added that one important factor for stablecoins is transparency as the asset class continues to grow.

The role of the stablecoin in the crypto markets has and will continue to evolve as adoption of crypto increases, forcing a more prominent role of stablecoins across the larger financial ecosystem. Regulation will only strengthen the importance and give credence to the role that stablecoins will play.

PwC report

Retail CBDCs Have a Higher Level of Maturity

Retail CBDC projects refer to digital currencies designed for public use, whereas wholesale CBDCs are used by financial institutions with accounts on central banks.

Thailand and Hong Kong were leading the wholesale category for their joint partnership to launch mBridge – a multi-country CBDC project that seeks to create a common platform to enhance cross-border payments.

Overall, retail CBDC projects [digital currencies designed for public use] have reached greater maturity levels than wholesale projects, but the past year has seen progress on a number of successful wholesale pilots.

PwC report

Another example of wholesale CBDCs is the combined efforts of the central banks of Australia, Singapore, Malaysia and South Africa to launch Project Dunbar, which seeks to create two multi-CBDC platforms shared by multiple central banks to transact with each other using different digital currencies.

Retail CBDCs, however, have a far higher level of maturity compared to their counterparts, the report noted. For example, in October last year Nigeria became the first African country to launch its own retail CBDC, the eNaira, which received a score of 95 out of 100, making it the most developed project across both categories.

The Bahamas, Jamaica and China Taking the Lead

Other countries with a high level of maturity include The Bahamas, the first country to launch a retail CBDC, the Sand Dollar. Thailand and Jamaica are also testing their CBDC projects, which were announced last year.

China was the first major economy to test a CBDC pilot, in 2020, and it is now fully running in 12 cities as of March 2022. What’s interesting is that China is also rolling out its own state-backed blockchain, BSN, which will support the creation of China’s own version of Non-Fungible Tokens (NFTs).