The report shows that during the 2020 Covid-19 pandemic, research on CBDC is still proceeding rapidly. The vast majority of central banks participating in the survey (86%) are actively studying the pros and cons of CBDC. In general, countries are entering a more advanced stage of CBDC research and are gradually advancing to pilot projects. From a global perspective, the interest of various countries in CBDC is affected by actual domestic conditions. Data shows that in emerging markets and developing countries, central banks have relatively strong incentives to study CBDC.
From the perspective of CBDC research, the goal of improving financial inclusiveness and payment efficiency has promoted the research work of retail CBDCs, but some central banks with leading research studies are becoming more and more cautious about their plans to issue CBDCs. At the same time, countries are becoming more and more aware of the impact of CBDC on cross-border finance and need to carry out international cooperation to find common points and collaboration points.
In the next three years, it is likely that the central bank issuing retail CBDC will cover one-fifth of the world’s population. However, most central banks are still unlikely to issue CBDC in the foreseeable future.
The survey was conducted in the fourth quarter of 2020. The sample involved 65 banks, of which 21 central banks belong to advanced economies (AE) and 44 belong to emerging markets and developing economies (EMDE), covering 72% of the world The population accounts for 91% of global economic output.
Survey results show
1. The central bank’s interest in CBDC further increases
Currently, about 60% of central banks are conducting experiments or proof-of-concepts, while 14% of central banks are conducting pilot arrangements. It should be noted that strengthening the CBDC research work does not represent a decision to actually initiate the issuance of CBDC.
In general, the research results show that different countries have different motivations for researching CBDC, and the motivations for researching wholesale and general CBDCs are also different. The actual situation of each country (such as the development and structural status of the national payment system and the degree of financial inclusion within jurisdiction) determines The motivation of the research.
Improving financial inclusion and payment efficiency are the main motivations for retail CBDC. At the same time, developing economies have stronger incentives to study retail CBDCs than developed economies. A typical example is the Bahamas retail CBDC-SandDollar, Mainly to help the country achieve financial inclusion-the country has 390,000 people spread across 30 islands, many of which are remote islands.
The survey also shows that, over time, enhancing financial stability and the effectiveness of monetary policy have become more important motivations for CBDC work in developing economies. On the contrary, these motivations seem to have become less important in advanced economies. Another important motivation emphasized by the central banks of several advanced and developing economies is to ensure that households and companies can continue to receive central bank funds while the use of cash in transactions decreases.
Compared with the retail type, the wholesale CBDC is less valued globally. This is reflected not only in the number of ongoing projects, but also in the weakening of the central bank’s motivation to study this type of CBDC. The only area where wholesale CBDC is more motivated than retail CBDC is the improvement of cross-border payment efficiency, but there are other motivations. The Helvetia project in cooperation with BIS, the Swiss National Bank, and infrastructure provider SIX explored the feasibility and legal stability of tokenized assets through wholesale CBDC.
A sound and clear legal framework is the basic premise for the central bank to issue any type of CBDC. But at present, about 26% of central banks have no right to issue CBDC, and about 48% of central banks are still uncertain. This shows that most central banks have not yet promoted development and pilot arrangements.
5. In the foreseeable future, most central banks are unlikely to issue CBDC
Currently, the central bank, which covers one-fifth of the global population, has indicated that it is possible to issue retail CBDC in the next three years. But at the same time, about 60% of central banks believe that they will not issue any type of CBDC in the foreseeable future (that is, in the short and medium term).
Compared with retail CBDCs, wholesale CBDCs are less likely to be issued, and the interest of developing economies is more obvious. However, according to the survey results in recent years, it is predicted that the number of countries that are “very unlikely” for issuing wholesale CBDC in the short and medium term will continue to decline, and more and more countries regard the issuance of CBDC as “possible.”
6. The development of stablecoins is closely watched
Cryptocurrency is a privately issued crypto asset with its own “currency” unit of account, such as Bitcoin and Ethereum. In 2020, the value of many cryptocurrencies has soared, fully in line with their form as speculative assets.
At the same time, most monetary authorities are analyzing stablecoins. According to the survey, two-thirds of central banks are studying the impact of stable currencies on currency and financial stability, especially the impact on the cross-border payment system.
In 2020, the issuance and promotion of retail CBDC will be officially launched, and more CBDCs may be launched in the next few years. Now, most central banks are actively carrying out CBDC research. Overall, the survey shows that research in various countries has undergone a continuous transformation from purely conceptual research to trials and pilot projects. But it seems that there is still some way to go before CBDC is widely used.