A global survey shows that central banks are proceeding with caution on issuing their own digital currency, and most of them are only at a conceptual stage.
Swiss-based Bank of International Settlements (BIS surveyed 63 of its members on central bank digital currencies (CBDC), a form of government issued digital money that might not necessarily be underpinned by blockchain, as the case is with bitcoin.
BIS, which serves as a bank for central banks, is the oldest global financial institution and operates under the auspices of international law.
Responses from the survey show that only a handful of banks have moved to considering practical issues, and have firm intentions to issue a CBDC within the next decade.
A couple of central banks with “idiosyncratic circumstances” might issue a digital currency in the short or medium term, the report says.
Many central banks, including Bank of Canada, Monetary Authority of Singapore, and South African Reserve Bank are attempting to replicate wholesale payment systems using distributed ledger technology.
Only five central banks have progressed to running pilot projects, which are only investigative in nature and do not imply plans to issue digital currency.
Central banks note that supporting digitalization, incorporating the informal economy and fighting financial crime, are key motivators for potentially issuing a CBDC. Some advanced economies are motivated by the prospect of a “less-cash” or even “cash-less” society.
No central banks reported any significant or wider public use of cryptocurrencies for either domestic or cross-border payments in their jurisdictions.
Most people will have to wait to use a central bank digital currency. However, central banks are working hard to make sure the wait is worth it, says the report titled “Proceeding with caution – a survey on central bank digital currency.”