According to an official survey, the World Central Banks said that they would most likely issue a “central bank digital currency” or CBDC over the next three years.
According to a CBDC survey conducted by the Bank for International Settlements (BIS) last week, central banks are likely to issue their own cryptocurrencies over the next three years. This possibility was confirmed by 80% of the banks out of 66 respondents.
Although about 70% of banks still find it unlikely to issue any type of CBDC in the very near future, 80% of them claim to be working on or thinking about the CBDC. 10% of them are already in the test phase.
Who will be the first
All central banks that have moved from conceptual research to development are emerging market economy (EME) banks
Research suggests that these banks have a stronger incentive to develop CBCDs than those with more advanced economies. In particular as regards financial stability, payment efficiency and payment security. Accordingly, emerging economies central banks are likely to issue CBDCs first.
It seems that banks in advanced economies are not in a hurry and are instead focusing more on establishing more international cooperation.
Cryptocurrencies offer stability
BIS also asked central banks about cryptocurrencies in general. The survey showed that one central bank, whose jurisdiction faces severe civil unrest, has seen a significant increase in cryptocurrency adoption and confirmed their wider use by the public for domestic and cross-border payments.
Another interesting thing is that about 60% of central banks address the impact of cryptocurrencies on monetary and financial stability.
Although the motivation for CBDC research varies greatly depending on the particular jurisdiction, the report found that cash – or rather its lack – was the main driver.
Emerging economy central banks are working on the CBDC to reduce local dependency on cash, while advanced economies’ central banks are more concerned with financial inclusion and aim to give the general public better access to central bank money. We are all wondering what it will look like in three years.