Central banks worldwide are exploring ways to issue their digital currency, also known as central bank digital currencies (CBDCs). In a report released in January 2020, the Bank for International Settlements (BIS) surveyed 66 central banks and found that 80 percent were developing CBDCs.
Many central banks believe digital currencies can increase payments efficiency, safety (domestic and cross-border), and financial stability. Overall, banks want to be more cost-effective so they can better service people, especially in uncertain or crisis times.
Many central banks believe digital currencies can increase payments efficiency, safety (domestic and cross-border), and financial stability. Overall, banks want to be more cost-effective so they can better service people, especially in uncertain or crisis times.
CBDCs are virtual or digital assets issued and regulated by a nation's monetary authority or central bank. Unlike cryptocurrencies, that grew in popularity since Covid, they are not decentralized.
The Bahamas launched the "Sand Dollar" digital currency in 2020. The Bahamian dollar-pegged digital money can be used domestically and internationally. Nigeria and seven ECU nations have also launched a digital currency.
China will start a CBDC first, say experts. e-CNY (digital yuan) was established in 2014. In April 2021, China began testing e-CNY in several cities, including Beijing, Shanghai and Shenzhen.
The Indian government expects to issue a digital version of its currency, the rupee, in the 2022-2023 financial year beginning in April. The digital rupee would be issued by the Reserve Bank of India, the country’s central bank.
The Central Bank of Taiwan (CBT) has spent two years developing the CBDC, which allows payments without a debit or credit card. Taiwan began looking towards building the CBDC in September 2020
The European Commission said it will produce a digital euro bill in 2022. EU Financial Services Commissioner Mairead McGuinness said the law permits the ECB to design a virtual Euro notes or coin.