The Bank of International Settlement (BIS) has said that there could be up to 15 retail Central Bank Digital Currencies (CBDCs) and eight wholesale CBDCs before the end of the decade.
The Switzerland-based group owned by 63 central banks conducted a new survey on the growth of CBDCs and their role in the digital asset market.
According to the findings, 93% of Central Banks globally have launched research into CBDCs with more than 50% taking it a step further with concrete plans or working on a pilot.
From the 86 Central Banks interviewed by the BIS, it concluded that 15 retail CBDCs are likely to be in circulation in the financial markets by 2030.
“Global work on CBDCs has made further progress. If issued, retail CBDCs can be expected to complement and coexist with other domestic payment methods.”
The report noted that certain countries including India, the United Kingdom, and the European Union Nations have rolled out plans to explore the sector in order to bridge the financial gap among the unbanked worldwide.
Despite the increase in the adoption of digital assets leading to big institutional investors and countries drafting regulatory frameworks, the survey noted that stablecoins and other virtual currencies are not used for many transactions outside the crypto market.
The survey also confirmed previous analyst statements that cross-border remittances top the use of stablecoins outside the crypto ecosystem.
CBDCs could drive adoption
In recent years, there has been a growing debate on the effect of CBDCs on traditional cryptocurrencies. Many opined that the growth of government-backed stablecoins defeats the idea behind cryptocurrencies.
Digital asset creates a decentralized network giving users freedom from centralized control over their finance.
However, this report states that Central Banks see value in digital assets to support fast payments and to link up more disadvantaged communities through the blockchain.
Retail CBDCs are key in driving a sustainable adoption of digital assets taking into consideration low-income earners and small-scale businesses.
Last month, the Bank of England released the report of the Rosalind tests highlighting a template around a two-tier retail CBDC model which solves the problem of centralization.
The model would see Central Banks create the infrastructure while multiple financial institutions will create APIs with different functionality to allay fears of over-centralization.
Recall that Ron DeSantis the Governor of Florida described CBDCs as a tool of surveillance by the government adding that his government would push back on “woke ideology” in the financial sector.
“protect Floridians from the Biden administration’s weaponization of the financial sector through a Central Bank Digital Currency.”
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