According to a study by the Atlantic Council think tank, 130 countries, representing 98% of the global economy, are now exploring digital currencies. Nearly half of these countries are in advanced stages of development, pilot testing, or launching their digital currencies.
The research states that all G20 countries, except Argentina, are in advanced phases of developing digital currencies. Eleven countries, including several in the Caribbean, and Nigeria have already launched their central bank digital currencies (CBDCs). China’s pilot testing covers 260 million people and 200 scenarios, ranging from e-commerce to government stimulus payments. India and Brazil also plan to launch digital currencies next year. The European Central Bank aims to begin its digital euro pilot and over 20 other countries will take significant steps towards pilots this year.
In the United States, progress on a digital dollar is primarily focused on the wholesale (bank-to-bank) version, while the development of a retail version for the wider population has slowed. However, President Joe Biden ordered officials to assess the risks and benefits of creating a digital dollar in March 2022. The Federal Reserve has emphasized that Congress should determine whether a digital version is launched due to the dollar’s significant position in the financial system.
The global interest in central bank digital currencies is driven by the decline in physical cash usage and the need to counter the influence of bitcoin and ‘Big Tech’ companies. Sanctions on countries like Russia and Venezuela have also played a role, leading even long-time U.S. allies like Europe to seek alternative payment networks. The research revealed that there are currently 12 multi-country “cross-border” projects in progress.
Sweden is one of Europe’s most advanced countries in terms of CBDC development, with a pilot program underway. The Bank of England is also progressing with its work on a potential digital pound. Australia, Thailand, South Korea, and Russia plan to continue pilot testing this year. However, some countries that have launched digital currencies, such as Nigeria, have experienced low adoption rates, while others like Senegal and Ecuador have canceled their development work.
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