According to the Bank of International Settlements’ (BIS), nine of ten central banks are currently researching how to create their own CBDC. These financial institutions also have 50% of these products in development or are conducting experiments.
CBDCs are a popular option for central banks
BIS, an international monetary institution, questioned 81 central bankers to find out their views on CBDCs and the likelihood of them launching one. The results showed that 90% of participants said they are working towards the introduction of this product. Nearly half the central banks are currently working on CBDC research or conducting “concrete experiments”.
“Globally, more that two-thirds (or more) of central banks believe they might issue a retail CBDC in the medium or short term. The BIS stated that CBDCs are considered by central banks to be capable of relieving key pain points, such as the short operating hours of current payment system and the lengthening of transaction chains.
It is worth mentioning China’s efforts in CBDCs. Contrary to cryptocurrency, local authorities are strongly in favor of digital yuan concepts and launch initiatives to promote it.
This financial product was created as a payment option during the Beijing Winter Olympic Games. Daily transactions accounted for around $300,000.
Furthermore, officials from China distributed substantial amounts of money to residents in major cities such as Beijing, Shenzhen, Chengdu.
Malaysia, Thailand and other countries are also looking into the possibility of launching such a project, or conducting trials, including Indonesia, Mexico, Zambia, Indonesia, Mexico, Thailand, Indonesia, and Mexico.
The study by the BIS also included CBDCs. As a payment method, stablecoins could be backed by one fiat currency. However, the institution was not as bullish about digital assets or commodities pegged to bitcoin.
From 80% to 90 %
According to the BIS’s previous survey, 80% of central banks plan to roll out their own CBDCs. It is important to note that the research was done in 2019 and included 66 participants instead of 81.
All banks that tested future CBDCs at their banks were from emerging markets, not advanced economies.
EMEs have a stronger incentive than advanced economies to develop general-purpose CBDCs that can be used as a replacement or complement to banknotes. EMEs are generally considered to be “very important” when it comes to domestic payments efficiency, financial inclusion, and payment safety. Payment safety was the only motivating factor for advanced economies.
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