A recent study by the Atlantic Council revealed that 98% of the global Gross Domestic Product (GDP), representing 134 countries, are actively exploring the adoption of central bank digital currencies (CBDCs). This marks a significant surge from just 35 countries since May 2020.
Currently, 68 countries are in advanced stages of CBDC exploration, including development, pilot programs, or even launching phases. Most notably, the majority of G20 nations, except Argentina, are at advanced stages, with 11 already piloting CBDCs. These nations encompass Brazil, Japan, India, Australia, South Korea, South Africa, Russia, and Turkey.
In contrast, progress on retail CBDCs has stalled in the United States. Federal Reserve Chair Jerome Powell recently informed the Senate Banking Committee that there are no immediate plans to introduce a digital dollar. He reassured that there’s no imminent need for concern regarding a central bank digital currency, citing privacy concerns among US citizens as a hindrance to its development.
Meanwhile, China’s digital yuan (e-CNY) remains the most extensive CBDC pilot globally, with 260 million wallets in use across 25 cities.
The European Central Bank (ECB) is actively pursuing the development of a digital euro, targeting a potential launch in 2025. Practical tests and trials are underway to ensure the functionality and security of the digital currency.
To date, only three countries – the Bahamas, Jamaica, and Nigeria – have successfully launched CBDCs. The Eastern Caribbean Currency Union, comprising eight countries, faced technical challenges with its DCash initiative, leading to its suspension. The union is now working on a new pilot program.
Among BRICS nations (Brazil, Russia, India, China, and South Africa), none have fully launched a CBDC yet, with all currently in the pilot phase. Additionally, new BRICS members such as Saudi Arabia, Iran, and the UAE are exploring cross-border wholesale CBDCs. The BRICS bloc has been actively advocating for an alternative payment system to the US dollar since last year.
Following Russia’s invasion of Ukraine, there has been a notable uptick in wholesale CBDC developments. Currently, 13 cross-border wholesale CBDC projects are underway. Notably, mBridge, connecting China, Thailand, the UAE, and Hong Kong, is set to expand to 11 additional countries this year.