Out research of the Bank of International Settlements (BIS) shows that no less than 90% of central banks worldwide are so-called central bank digital currencies (CBDCs) is investigating whether or not it is already underway. With that, it looks like central bank-issued digital currencies will be part of the future!
Digital currencies can solve pain points
The BIS asked 81 central banks for their position on whether or not to launch a CBDC. 90% of them state that they are indeed involved in such projects. In addition, 50% say they are already working on concrete tests.
The fact that 90% are now working on this is an increase compared to 2019. Then the BIS surveyed 66 central banks, 80% of which said they were investigating CBDCs at the time. At that time, this was also an increase of 10% compared to the previous year. So there is a clear upward trend in the number of central banks that conduct research or actual tests with the digital currency.
The reason they do this is because it can solve several pain points that traditional systems now have. This is how the BIS explains:
“Globally, more than two-thirds of central banks believe they are likely to or could issue a CBDC for individuals in the short or medium term. Central banks consider CBDCs to be able to alleviate key pain points such as the limited opening hours of current payment systems and the length of current transaction chains.”
CBDCs vs. Bitcoin
The big question, of course, is whether CBDCs make current cryptocurrencies obsolete. That seems unlikely given that the different projects usually have different applications. Bitcoin (BTC) will not become redundant either, since the mother of all cryptocurrencies is not controlled by any central party. This is of course the case with CBDCs.
Some even argue that CBDCs pose a threat to our financial freedom. This is of course at odds with what Bitcoin and other cryptocurrencies stand for.