A Bank for International Settlements (BIS) survey found that 94% of central banks worldwide want to implement Central Bank Digital Currencies (CBDCs). It surveyed eighty-six central banks between October 2023 and January 2024.
The survey depicts how close every nation is to hopping onto blockchain technology, with central banks implementing CBDCs for interbank settlement processes. The survey conducted revolved around wholesale CBDCs and not the retail kind. The difference lies in who uses the tokens.
Banking entities will use wholesale CBDCs for purposes such as daily settlements with each other. On the other hand, retail CBDCs are what individuals would use for their daily transactions. Full-scale retail CBDCs may be several years away, but their wholesale counterparts see usage already in a few geographies like the Bahamas, Nigeria, and Jamaica.
A long list of jurisdictions will implement their wholesale CBDCs shortly as their programs to create, test, and deploy them have kicked off. Many more will institute such programs soon, reveals the survey. It also showed that stablecoins do not witness massive usage beyond the crypto ecosystem. Due to their pegs with fiat currencies, a notable use case would be to use it like a fiat currency.
However, central banks have not adopted it for settlement and transaction purposes. Retail users, too, represent a small fixture and are present within the crypto community – the mainstream does not recognize the asset yet.
Central banks would be against using stablecoins because of the reduced control in transacting assets over decentralized, public blockchains. CBDCs will get deployed on private blockchain ecosystems that the banks would control, so these CBDCs make more sense to them than adopting stablecoins.
The private nature of these blockchains can also cause issues from the get-go, despite the control they offer, like a lack of interoperability due to the fragmented blockchain ecosystems. Also, their private nature is stirring up quite the storm within the crypto community, with many calling CBDCs authoritarian. The most recent individual to do so was the current US presidential candidate and former president Donald Trump.
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