Over 100 countries are actively exploring Central Bank Digital Currencies (CBDCs)

Central Bank Digital Currencies (CBDCs) are gaining prominence as they aim to revolutionize transactions in the digital era. While the currency is facing criticism, most countries worldwide are actively engaging with CBDCs due to their potential in the evolving realm of digital money.

In this line, data acquired by Finbold indicates that by the first half of 2023, 109 countries were actively exploring or engaging in CBDCs across various phases. Among these countries, 45 were involved in research, 32 were engaged in development, and 21 were in the pilot stage. Additionally, 16 countries were inactive, with 11 having already launched their CBDC projects, while two had canceled their involvement.

Elsewhere, in June 2023, the number of countries in advanced exploration phases of CBDC development, including pilot and launched stages, reached its highest level, with a total of 64 countries. This figure represents a 28% increase from the value of 50 countries in May 2022. In June 2021, the value stood at 41 countries.

Tackling private cryptocurrencies

The report highlighted some of the drivers behind the push to establish CBDCs. According to the research report:

“The notion that the rise of cryptocurrencies and stablecoins poses a threat to national currencies has emerged as one of the key drivers behind CBDCs. In this case, CBDCs respond to this challenge, ensuring central banks keep up with the digital revolution.”

Despite the advancement in CBDCs, the currency has received criticism on various grounds, such as a threat to privacy and related implementation operational challenges. Overall, the future significance of CBDCs depends on current research and experimentation results.