More than four-fifths of the world’s central banks (86%) are engaged in “some form of work” on a central bank digital currency (CBDC), up from “about one third” in 2019, according to a Bank for International Settlements (BIS) survey.

Some 60% are actively conducting experiments or proofs-of-concept and 14% are moving into development and pilot phases, the survey found.

“Central banks collectively representing a fifth of the world’s population are likely to issue a general purpose CBDC in the next three years,” BIS says.

“In addition, some 21% of jurisdictions (up from 14%) consider this a possibility.”

Interest in and activity relating to a general purpose or retail CBDC are now outstripping work relating to wholesale CBDC, BIS notes.

Key motivations

The survey also identifies financial inclusion, domestic payments efficiency and payments safety as key motivations for introducing a CBDC, but adds that financial stability and monetary policy are becoming more important factors for emerging markets and developing economies.

“The year 2020 saw the official launch of a retail CBDC [the Bahamian Sand Dollar], and it is likely that more will be rolled out in the coming years,” BIS comments.

“Most central banks are now exploring the case for CBDCs in some way and, overall, the survey indicates a continuous move from purely conceptual research to experimentation and pilot projects. Yet despite these developments, a widespread roll out of CBDCs still seems some way off.”

The survey was conducted among 60 central banks in late 2020 and the full results can be downloaded in PDF format here.

BIS announced in January that it is to build a proof-of-concept platform for cross-border payments.

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