BIS Survey Predicts 24 Central Banks to Adopt Digital Currencies by 2030

LONDON – Two dozen central banks from both developing and mature nations are expected to circulate digital currencies by 2030, ushering in a new financial age. This startling discovery was revealed by the Bank for International Settlements (BIS) study, the results of which were released on Monday.

As the world witnesses an accelerating decline in cash use and the soaring popularity of digital transactions, central banks worldwide have been meticulously exploring the potential of their digital currencies for retail applications. The goal is to ensure that the private sector does not solely dominate the digital payments landscape. Some central banks are additionally considering the development of wholesale versions specifically designed for inter-financial institution transactions.

The BIS survey, conducted among 86 central banks in late 2022, suggests that a significant portion of the impending Central Bank Digital Currencies (CBDCs) will appear in the retail sector. This move would see eleven central banks joining the likes of the Bahamas, the Eastern Caribbean, Jamaica, and Nigeria, which already boast live digital retail currencies.

On the wholesale front, a future where financial institutions can unlock new capabilities through tokenization could soon be a reality, with nine central banks potentially launching their wholesale CBDCs, according to BIS.

“The introduction of wholesale CBDCs is primarily driven by the need to enhance cross-border payments,” noted the authors of the BIS report. For instance, the Swiss National Bank announced in late June its intention to issue a wholesale CBDC on Switzerlands digital exchange as a pilot project. Concurrently, the European Central Bank is gearing up to initiate its digital euro pilot ahead of a tentative 2028 launch. China is currently testing its digital currency pilot among 260 million people, and two other significant emerging economies, India and Brazil, are gearing up to unveil their digital currencies next year.

BIS's survey also showed a remarkable increase in the share of central banks engaged in some form of CBDC development, reaching 93 percent. Sixty percent of these institutions credit the rise of stablecoins and other crypto-assets as catalysts accelerating their work in this direction.

The crypto market has experienced its fair share of upheaval in the past 18 months, with high-profile collapses like that of the unbacked stablecoin TerraUSD in May 2022, and the bankruptcy of crypto-supporting banks such as Silicon Valley Bank and Signature Bank. While these incidents have had minimal impact on traditional financial markets, they have triggered sell-offs in multiple crypto assets.

The BIS survey discovered that nearly 40 percent of the participants indicated that their central bank or other institutions within their jurisdiction had recently conducted a study on the use of stablecoins and other crypto-assets among consumers or businesses. This suggests that concerns around the potential threats to financial stability posed by widely-used crypto-assets, including stablecoins, are gaining traction.

In conclusion, as we embark on this journey of the digital monetary revolution, stay updated on the latest news by downloading and installing the WikiFX App on your smartphone. Download the App here: https://www.wikifx.com/en/download.html.