Nine out of 10 central banks around the world are exploring central bank digital currencies (CBDCs), according to a survey conducted by the Bank for International Settlements (BIS).
The survey also found that more central banks are developing or testing a retail CBDC or consumer digital currency than a wholesale CBDC to be used by banks.
The report released Friday by the BIS, an umbrella organization for central banks, presents the results of a survey of 81 central banks conducted in the fall of 2021. The survey looked at banks' level of engagement with CBDCs, as well as their motivations and intentions regarding CBDC issuance. The BIS is owned by 63 central banks, representing about 95% of global GDP.
More than half of the central banks surveyed are developing CBDCs or conducting actual experiments," according to the findings. About 20% are developing or testing a retail CBDC, which is double the number of central banks working on a wholesale digital currency.
Around the world, central banks are actively exploring CBDCs as economies look to strengthen their digital payments and banking infrastructure. From potentially improving financial inclusion to speeding up cross-border remittances, CBDCs promise much in theory, but as China has taken the lead in developing and testing a digital yuan, some governments around the world also see CBDCs as a currency sovereignty play.
In September 2021, the BIS signaled that central banks around the world should start working on CBDCs. According to the Atlantic Council's CBDC Tracker, 87 countries representing over 90% of the global economy are working on CBDCs.
"On average, nearly six in 10 central banks surveyed said this growth has accelerated their work on CBDCs," the report says.
The countries represented in the BIS survey account for nearly 76% of the world's population, with 56 of the central banks surveyed representing emerging market and developing economies.
While the central banks of the Bahamas, China, and Nigeria have already issued or are piloting a retail CBDC, the survey found that other countries are likely to follow suit in the "foreseeable future," with 68%.
In addition to questions about CBDCs, the survey also asked central banks about stablecoins (cryptocurrencies pegged to the value of other assets or currencies such as the U.S. dollar) and cryptocurrencies in general.
"Central banks' expectations that stablecoins will become widespread and accepted as a means of payment vary depending on the type of stablecoin," the report states. Central banks appear to believe that stablecoins backed by a single currency are far more likely to become accepted as a means of payment than other types of stablecoins linked to commodities or other cryptocurrencies.
About 70% of central banks are studying the potential impact of stablecoins on monetary and financial stability, while about a quarter are examining the use of cryptocurrencies.