PYMNTS-MonitorEdge-May-2024

Report: Digital Currency Projects Underway in 134 Countries

CBDC

New research shows that 134 countries are exploring central bank digital currencies (CBDCs).

Those countries account for 98% of the world’s economy, according to findings released Tuesday (Sept. 17) by think tank Atlantic Council.

The latest figures show that all G20 countries are looking into CBDCs, with 44 countries piloting the digital currencies, up from 36 last year.

Three countries have launched CDBCs: the Bahamas, Jamaica and Nigeria. And two explored digital currencies before canceling them: Ecuador and Senegal.

“There has been a narrative that the countries that have launched CBDCs have seen low or no usage, but in the last months we have seen a real uptake,” the council’s Josh Lipsky told Reuters, adding that he predicts that the People’s Bank of China “will be close to full launch a year from now.”

This isn’t to say CBDCs have won universal acclaim. For example, last month saw a report by Bloomberg News that many people in Germany — the European Union’s largest economy — were not ready for a digital euro, citing privacy concerns and a preference for using cash.

“Privacy concerns have also driven some of the anti-CBDC sentiment in the U.S., with the House of Representatives in May passing legislation that would require Congress to OK any issuance of a U.S.-backed digital currency,” PYMNTS wrote.

The Bloomberg report noted that the European Central Bank (ECB), which is expected to make a decision on implementing a CBDC in late 2025, is aware of the concerns around it, and plans to address privacy/security worries with techniques such as data encryption and hashing to prevent links between transactions and specific users.

The bank also plans to make the currency available via card — and not just on mobile phones — for offline usage.

“We envisage a digital euro as a digital form of cash that can be used for all digital payments, coexisting with physical cash, leaving no one behind,” ECB President Christine Lagarde said last year as the project’s preparation phase began.

In other recent CBDC news, the Bank of England said in July it was conducting experiments with the digital currencies for retail use. The U.K.’s CDBC, dubbed “Britcoin,” is not expected to be ready until at least next year.