There are now 105 countries that are exploring central bank digital currencies (CBDCs). Among them, 50 countries are in an advanced phase of digital currency exploration (development, pilot, or launch).
The Atlantic Council’s Geoeconomic Centre has released a major update to its Central Bank Digital Currency (CBDC) Tracker. According to the tracker:
105 countries, representing over 95 percent of global GDP, are exploring a CBDC … A new high of 50 countries are in an advanced phase of exploration (development, pilot, or launch).
Furthermore, the tracker details that “10 countries have fully launched a digital currency, with China’s pilot set to expand in 2023.”
Among the G20 countries, 19 are exploring a CBDC, with 16 already in the development or pilot stage. They include South Korea, Japan, India, and Russia.
Last month, the Bank of International Settlements (BIS) released a report stating that 9 out of 10 central banks globally are exploring CBDCs. The BIS said, “the emergence of stablecoins and other cryptocurrencies have accelerated the work on CBDCs.”
Read more: Jamaica Becomes First Country to Make a CBDC Legal Tender
(Jan. 21, 2022) Pros and cons of a U.S. central bank digital currency (CBDC) are examined in a discussion paper released by the Federal Reserve Thursday, the agency said, which also seeks public comment in four months.
The Fed described the paper as a “first step in a discussion of whether and how a CBDC could improve the safe and effective domestic payments system.” The paper takes no policy position, the Fed asserted.
The paper addresses, according to the agency, several issues including the state of the domestic payments system and different types of digital payment methods and assets that have emerged in recent years, including stablecoins and other cryptocurrencies.
The paper also examines the potential benefits and risks of a CBDC, and identifies specific policy considerations, the Fed said. Among the considerations: could a CBDC negatively or positively affect financial stability; would it adversely affect the financial sector differently from stablecoins or other nonbank money; should CBDC be legal tender; should it pay interest; what types of firms should serve as intermediaries for CBDCs, and what should be the role and regulatory structure for the intermediaries.
“Other key policy considerations include how to preserve the privacy of citizens and maintain the ability to combat illicit finance,” the Fed said.
Comments will be due in 120 days (four months), the Fed said.
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(May 28, 2021) Discussion of digital currency and if (or when) the Federal Reserve will begin issuing its own version of the new money was ramped up over the last week following comments by the agency board’s chair and the board member who watches over the nation’s payments system.
First up was Fed Chair Jerome H. (“Jay”) Powell, who last week said the development and enablement of a central bank digital currency (CBDC) for use by the general public is among the technological advances being explored by the Federal Reserve. Further, he revealed, the agency plans to publish a “discussion paper” this summer that will delve into the implications of digital payments – including possibly a U.S.-issued digital currency.
The key focus for the Fed, Powell said, is whether or how a CBDC could improve on what he called the existing “already safe, effective, dynamic, and efficient U.S. domestic payments system” in serving households and businesses. In any event, he said the Fed does not see digital currencies as a replacement for cash and coin – at least for now.
“We think it is important that any potential CBDC could serve as a complement to, and not a replacement of, cash and current private-sector digital forms of the dollar, such as deposits at commercial banks,” Powell said. “The design of a CBDC would raise important monetary policy, financial stability, consumer protection, legal, and privacy considerations and will require careful thought and analysis—including input from the public and elected officials.”
This week, Fed Gov. Lael Brainard (who chairs the Fed’s payments committee) said this summer’s paper on digital money will be used to solicit public comment on a range of questions related to the use of the new currency, including payments, financial inclusion, data privacy and information security.
She also said that a digital dollar would be a new type of central bank money issued in digital form for use by the general public. “By introducing safe central bank money that is accessible to households and businesses in digital payments systems, a CBDC would reduce counterparty risk and the associated consumer protection and financial stability risks,” she said. She added that introducing a CBDC may provide an “important foundation” for beneficial innovation and competition in retail payments in the U.S.
LINKS:
Transcript of Chair Powell’s Message on Developments in the U.S. Payments System