Sunday, June 16, 2024

Over 130 Countries Speeding Towards CBDC System, Majority Already in Advanced Phases

Central Bank Digital Currency CBDC systems are rapidly gaining momentum worldwide, with the majority of countries racing to develop their own digital currencies.

According to recent research from the esteemed D.C.-based think tank, the Atlantic Council, a staggering 130 countries, constituting 98% of the global GDP, are now exploring the realm of CBDCs. This figure is a significant jump from the mere 35 countries that were considering CBDCs back in May 2020.

Remarkably, 64 nations are currently at an advanced stage in their exploration, encompassing various phases such as development, pilot programs, or even full-fledged launches of CBDC systems. Among these forward-thinking countries are 19 members of the G20.

However, the United States stands as an exception to this trend, where the development of a retail CBDC is currently facing obstacles and is somewhat “stalled.” Nevertheless, progress is being made in the domain of bank-to-bank CBDCs. In contrast, other prominent G7 countries, such as the Bank of England and the Bank of Japan, are actively engaged in developing CBDC prototypes and seeking input from both public and private sectors on matters of privacy and financial stability.

The situation changes when considering wholesale (bank-to-bank) CBDCs, where the US is moving forward despite previous constraints. The geopolitical situation, notably Russia’s actions in Ukraine and the G7’s response with sanctions, has fueled a doubling of wholesale CBDC developments, with 12 cross-border projects currently underway.

Looking ahead, over 20 countries are planning to take concrete steps towards piloting their CBDCs within this year. Notable among them are India and Brazil, both BRICS nations, who are targeting the launch of their CBDC systems in 2024.

Amidst this technological shift, some voices of caution have emerged. Peter Goettler, president of the Cato Institute, a libertarian think tank, has raised concerns about CBDCs and their potential to curtail individual freedoms while granting excessive power to governments and central banks. He asserts that CBDCs are essentially a response to the rise of cryptocurrencies, which have enabled transactions outside traditional financial systems with enhanced privacy. Governments, in a bid to maintain control, are pursuing the opposite approach – centralization, surveillance, and increased authority. This tension between CBDCs and private crypto solutions is likely to shape the future landscape of digital currencies.

Read Also: Tim Draper, Billionaire Investor, Forecasts Bitcoin (BTC) Surpassing the $250,000 Mark

Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.

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