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Most central banks are already exploring the possibility of issuing their own central bank digital currency (CBDC). In a recent report, the Bank of International Settlements (BIS) projects that a number of countries will be issuing their own digital currencies in the next three years.
The BIS recently released the result of its survey on CBDC development worldwide, according to Cointelegraph. The study, which was conducted in late 2020 and involved 60 central banks, revealed that most of the respondents are entering the “advanced stages” of engagement.
“Central banks collectively representing a fifth of the world’s population are likely to issue a general purpose CBDC in the next three years,” the BIS wrote it the report. “However, the majority of central banks remains unlikely to issue CBDC in the foreseeable future.”
Most of the surveyed central banks are weighing the pros and cons of issuing their own digital currencies. “The vast majority of central banks in the survey – 86% – are now exploring the benefits and drawbacks of CBDCs,” BIS added. “In recent months, major central banks have published a multitude of in-depth assessments of related policy issues and tested a variety of designs. 2020 also marked the arrival of a ‘live’ general purpose CBDC when the Bahamas launched its Sand Dollar for its residents on 20 October 2020.”
Around 60 percent of central banks surveyed are entering advanced stages and have progressed from conceptual research to experimentation last year, up from 42 percent in 2019, which suggests increasing interest in CBDC development. Meanwhile, 14 percent have already rolled out pilot programs for the projects.
The survey also explored the various motivations of central banks to pursue CBDC projects. Financial inclusion and payment efficiency for domestic transfers are the top factors for issuing digital currencies for monetary authorities of emerging markets and developing economies (EMDE) while central banks in advanced economies (AE) placed more emphasis on payments safety.
“Most central banks are now exploring the case for CBDCs in some way and, overall, the survey indicates a continuous move from purely conceptual research to experimentation and pilot projects,” the survey concluded. “Yet despite these developments, a widespread rollout of CBDCs still seems some way off.”
