Projects to develop a retail central bank digital currency (CBDC) for use by consumers and businesses are “more advanced” and “particularly strong” in emerging economies, according to analysis by global consultancy firm PwC.
The firm’s Global CBDC global index 2021 “is designed to measure a central bank’s level of maturity in deploying their own digital currency”. It has identified retail CBDC projects in the Bahamas, Cambodia, China, Ukraine, Uruguay, Ecuador, the East Caribbean, Sweden, South Korea and Turkey as being the 10 most mature in terms of “the central banks’ progress, stance on CBDC development and public interest”.
“Retail CBDC projects appear to be more advanced in emerging economies with financial inclusion stated as an expected outcome,” the report says.
“Wholesale efforts are mostly conducted in more advanced economies with more developed interbank systems and capital markets.
“Looking at the most advanced projects globally, retail efforts have already produced two live projects in the Bahamas and Cambodia.
“No interbank/wholesale CBDC projects have reached this maturity level yet. However, nearly 70% of declared wholesale projects are already running pilots, while only 23% of retail projects reached this implementation stage.”
According to PwC, the 10 most advanced projects to develop a wholesale CBDC predominantly for use in interbank payments and financial settlement processes are in Thailand, Hong Kong, Singapore, Canada, the UK, France, South Africa, Europe, United Arab Emirates and Japan.
“Cross-border projects make up the majority of the most advanced [interbank/wholesale] initiatives, allowing central banks to test cross-border connectivity and project interoperability,” the report says.
“Most advanced interbank/wholesale projects are expanding their scope to test interconnectivity with other interbank projects or the potential of linking with retail projects.”
In addition to more detailed analysis of the progress of the 10 retail and 10 wholesale CBDC projects identified as being the most mature globally, PwC’s CBDC Global Index report incorporates studies of four other digital finance and currency projects — in Switzerland, Italy and the USA, as well as the European Central Bank’s retail digital Euro — where it describes progress as advanced.