LONDON (Reuters), June 28 – A study closely followed shows that 130 countries, representing 98%, are exploring digital versions of currencies. Almost half of these countries have advanced stages of development, pilots or launches, the study showed.
According to the research published by the U.S. based Atlantic Council think-tank on Wednesday, significant progress has been made in the last six months and all G20 countries except Argentina are now in an advanced phase.
Eleven countries including some in the Caribbean as well as Nigeria have already launched what are called central bank digital currencies. In China, pilot testing now covers 200 scenarios ranging from e-commerce payments to government stimulus payments.
India and Brazil are also planning to launch digital currency next year. The European Central Bank will begin its digital pilot in anticipation of a launch as early as 2028. Meanwhile, over 20 countries plan to make significant progress towards pilots.
Research by the Atlantic Council found that progress in the United States on a digital currency is “moving ahead” only for a wholesale version (bank-to bank), while work on a version intended for wider use has “stalled”.
U.S. president Joe Biden has ordered government officials in March 2022 to evaluate the risks and benefits associated with creating a digital currency.
Federal Reserve insisted in January, that Congress and not it should make the decision on whether to launch a digital currency.
The global push to create CBDCs comes at a time when physical cash is declining and governments are looking to defend their money printing powers against bitcoin and the ‘Big Tech’ firms.
The sanctions imposed in recent years on countries like Russia and Venezuela have also been a driving force, even for U.S. longtime allies such as Europe who want to make sure they have an alternative payment network to Visa, Mastercard, and Swift.
“Since Russia’s invasion of Ukraine and the G7 sanctions response, wholesale CBDC developments have doubled,” the Atlantic Council said, adding that there were now 12 multi-country “cross-border” projects being worked on.
The Bank of England continues to work on the possible digital pound, which could be used by the end of the decade.
Australia, Thailand South Korea, Russia and all of them plan to continue testing pilot aircraft this year.
Although CBDCs are gaining popularity, there have been some disappointing results. For example, Nigeria has had a low take-up rate, while Senegal as well as Ecuador have cancelled their development plans.
Marc Jones Reports
Mark Potter, Editor
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