81 Central Banks Explore Launching their own Digital Currencies.
81 countries (representing over 90 percent of global GDP) are now exploring a CBDC. In our original report published in May 2020, only 35 countries were considering a CBDC.
The center added that of the countries with the largest central banks ( the US Federal Reserve, the European Central Bank, the Bank of Japan, and the Bank of England), the United States is furthest behind. That’s, the U.S is lacking behind in developing a state-backed digital currency.
Federal Reserve Chairman Jerome Powell explained in February why U.S is holding back introducing its own Digital Currency.
He said that ”the digital dollar was a very high priority for the Fed. He also explained better the need to ”get it right”, that, instead of rushing to launch a digital dollar, whether to compete with China digital Yuan, he said the digital Dollar will represent the cryptocurrency which will be managed and control in Central banks with tracking, ” I think that’s one of its strongest argument in its favor”(digital currency).
Meanwhile, 5 countries have now fully launched their own Digital Currency.
Here are the list of 5 countries that launched their own Central Bank Digital Currency.
Here are 5 countries that launched their own Digital Currency
- Bahamas
- Saint kitts and Navis
- Antigua and Barbuda
- Saint Lucia
- Grenada
Before Covid-19, Central Bank Digital Currency were largely a theoretical exercise. But with the to distribute unprecedented monetary and fiscal stimulus around the world, combined with the help of cryptocurrencies, central banks have quickly realized they cannot let the evolution of the money pass them.
This was made clear Josh Lipsky, Director of the Geoeconomics center and formal senior advisor at the International Monetary Fund (IMF).
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| World map of countries exploring digital currencies. |
More insight and opinion about Central Bank Digital Currency (CBDC)
Advantages of CBDC
- CBDCs are more cost efficient than physical cash as they have lower transaction costs.
- They can promote financial inclusion, meaning those who are unbanked can get easier and safer access to money on their phone.
- They can compete with private companies that need incentives to meet transparency standards and limit illicit activity.
- They can help monetary policy flow more quickly and seamlessly
- They are managed by Government: so it can be traced.
Disadvantages of CBDC
- Citizens could pull too much money out of banks at once and purchase CBDCs.
- A system designed to be private may produce backlash from users and create cybersecurity risks.
