Central bank digital currency, or CBDC, became an increasingly trending topic in 2021 after cash payments significantly dropped and cryptocurrencies and stablecoins grabbed news headlines.
While only a handful of countries already launched their CBDCs, many governments are exploring the possibility of using digital forms of central bank money.
According to data presented by AltIndex.com, more than 60% of all countries, or 130 of them, worked on developing their central bank digital currency last year.
The Number of Countries Working on CBDC Doubled Since 2017
In a world dominated by Google Pay, Apple Pay, and Alipay, everyday transactions heavily depend on private companies rather than central banks. The market for their services is massive, as more than 1.7 billion people still don’t have bank accounts and use costly alternatives. Cryptocurrencies have also become a threat, potentially chipping away state authority. All of these reasons have made governments and central banks start exploring the use of government-backed digital currencies, which give them a stronger presence in online payments.
The main goal of CBDCs is to provide businesses and consumers with financial security, privacy, accessibility, and convenience while managing their payments. These government-backed and central bank-controlled digital currencies can also reduce cross-border transaction costs and provide those using alternative money-transfer methods with more affordable options.
The Atlantic Council data show the number of countries working on their central bank’s digital currency has significantly increased in the past six years. Back in 2017, a total of 65 countries was involved in the development of a central bank digital currency. Three years later, this figure rose to 86.
However, after the major shift to digital payments amid the COVID-19 pandemic, the number of countries working on CBDCs jumped by more than 20% and hit 105 in 2022. By the end of 2023, another 25 countries jumped on the CBDC train, pushing their total number to 130, twice more than in 2017.
Only 11 Countries Have Fully Launched a Digital Currency
The statistics also show that out of 130 countries, representing 98% of global GDP, 64 were in an advanced phase of CBDC exploration. Nearly every G20 country made significant progress and invested new resources in these projects last year, and nine countries were already in the pilot.
For example, China’s pilot, with a reach of 260 million people, is being tested in more than 200 scenarios, some of which include e-commerce, public transit, and stimulus payments.
The Atlantic Council data also showed that only 11 countries have fully launched a digital currency, and India and Brazil plan to do so this year.
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