The COVID-19 pandemic has accelerated the trend of cashless payments, with central banks racing to develop and test digital currencies. According to survey data released by the Bank for International Settlements, 80% of the world’s 66 central banks said they are studying digital currency technology, and about 20% said they are likely to issue digital currencies in the next six years.
Many emerging market countries are developing CBDCs to promote financial inclusion and to enhance their economies’ payment efficiencies. At the same time, some developed countries are developing CBDCs to improve inter-bank payment efficiency, strengthen security, provide a faster and more transparent transaction settlement experience, and develop stronger capital markets.
Most central banks are designing and developing their CBDCs based on the needs of their countries, but what kind of CBDC does the world really need?
To answer this question, let’s take a glimpse at the current state of global payments.