The Bank for International Settlements (BIS) said its recent survey of central banks revealed that 94% of them globally are now engaged in exploring central bank digital currencies (CBDCs) \u2014 reflecting a sharp increase in experiments and pilots, especially with wholesale CBDCs.<\/p>\n
The findings \u2014 detailed in a report titled “Embracing Diversity, Advancing Together” \u2014 indicated that central banks are proceeding with caution and taking diverse approaches to CBDC implementation and design.<\/p>\n
The survey also found that central banks are motivated to explore CBDCs, with a key focus on preserving the role of central bank money amid the rise of privately issued digital currencies. Additionally, enhancing domestic payment efficiency, promoting financial inclusion, and improving cross-border payment systems are other significant drivers.<\/p>\n
The watchdog's survey\u00a0highlights the accelerating interest and efforts among central banks in developing CBDCs, with a clear trend towards wholesale applications.<\/p>\n
The survey, which gathered responses from 86 central banks, revealed a significant rise in wholesale CBDC projects, particularly in advanced economies.<\/p>\n
The likelihood of issuing a wholesale CBDC within the next six years now surpasses that of issuing a retail CBDC. Central banks have been enhancing their engagement with stakeholders to refine CBDC designs, focusing on features such as interoperability and programmability for wholesale CBDCs.<\/p>\n
For retail CBDCs, more than half of the surveyed central banks are considering incorporating holding limits, interoperability with existing payment systems, offline transaction capabilities, and zero remuneration.<\/p>\n
Differences in design preferences between advanced economies and emerging markets are evident, with the latter showing a greater inclination towards distributed ledger technology (DLT) and transaction limits.<\/p>\n
The BIS emphasized the importance of global cooperation to ensure a safe and efficient payment system as jurisdictions advance at different paces and adopt varied approaches.<\/p>\n
The survey also explored the use of stablecoins and other digital assets. It found that stablecoins are seldom used for payments beyond the crypto ecosystem.<\/p>\n
Despite the overall stablecoin market capitalization surging above $161 billion at the end of May 2024, the fiat-pegged tokens constitute only 6% of the total crypto market.<\/p>\n
Central banks observed that stablecoins are primarily used for crypto trading or within DeFi platforms, with minimal adoption for mainstream payment purposes.<\/p>\n
Central banks reported that stablecoins are mainly used by niche groups for remittances and retail payments rather than by the wider public. For example, stablecoins account for about 5% of remittances to Mexico.<\/p>\n
Despite this limited use, the potential for stablecoins to disrupt financial stability and payment systems remains a concern, driving regulatory efforts.\u00a0The primary regulatory objectives include protecting investors and consumers, ensuring financial stability, and countering illicit activities.<\/p>\n","protected":false},"excerpt":{"rendered":"
The Bank for International Settlements (BIS) said its recent survey of central banks revealed that 94% of them globally are now engaged in exploring central bank digital currencies (CBDCs) \u2014 reflecting a sharp increase in experiments and pilots, especially with wholesale CBDCs. The findings \u2014 detailed in a report titled “Embracing Diversity, Advancing Together” \u2014 […]<\/p>\n","protected":false},"author":1250,"featured_media":426212,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[76669,77968,32631],"tags":[],"prediction_market_topic":[],"post_folder":[],"acf":[],"yoast_head":"\n