The use of cash is dwindling. Back in 2011, over 50% of transactions in the US involved cash. This number has decreased to 28% in 10 years. The Covid 19 pandemic has raised cashless transitions further as more people adopt contactless payments.
Cashless payments means using banks and private payments companies for transactions which come with delays and fees. It also excludes 5.4% or 7.1 million Americans who are unbanked. This has necessitated the Federal Reserve and other central banks to think about digital currency which would foster financial inclusion. Interestingly enough, not only that many countries started exploring the adoption of their own digital currencies, even some big cities have done so. One of such examples is Miami and their MiamiCoin that is predicted to double in value in the next year.
CBDC tracker has compiled a list of countries at different stages of developing CBDC.
Bahamas leads the pack, having launched their CBDC in October 2020 called Sand Dollar, followed by Nigeria. About 13 countries are in the pilot stage, including Ghana, China, UAE, Singapore. Japan, Hong Kong, Turkey, Thailand, and Ukraine are in the proof of concept stage.
The rest include Kenya, the UK, the USA, South Africa are researching developed national digital currencies.
It is imperative to note that some countries are developing more than one type of national digital currency. For instance, Canada is piloting on Jasper while researching on eDolar. Similarly, People’s Bank of China is piloting e-CNY and researching China CBDC.