This BIS paper updates an earlier survey that asked central banks how their plans in this area are developing. The latest responses show emerging market economies reporting stronger motivations and a higher likelihood that they will issue digital currencies, with central banks representing a fifth of the world's population reportedly likely to issue very soon.
Research and experimentation on central bank digital currencies (CBDCs) continue to fuel discussion and debate. Central banks are continuing to research CBDCs. Yet there is no evidence of a widespread or general move to expand this research into experimentation and pilot arrangements. However, a few central banks with sufficient motivation are proceeding to pilot various designs.
Motivations for CBDC research continue to be diverse. Cash use is the key to driving many central banks’ plans, with EME central banks aiming to reduce reliance on cash, and advanced economies acting to pre-empt any issues that might be faced by the general public in accessing central bank money.
Although motivations are fairly stable, central banks with firmer plans to issue CBDC are now imminently close to doing so. Some 10% of the central banks surveyed are likely to issue a CBDC for the general public in the short term, representing 20% of the world’s population. Cross-border spillover effects are possible (CPMI-MC (2018)). Collaboration through international vehicles such as the BIS Innovation Hub will be necessary to avoid any unforeseen international consequences.
Finally, collaboration on understanding the impact of private digital tokens may also need to intensify. Stablecoins could find widespread adoption where cryptocurrencies have failed. Authors‘survey shows that more central banks could be looking at the risks outside the financial system while also exploring ways to improve the system with CBDCs.
Full working paper on BIS
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