This year could mark another major milestone for central bank digital currencies (CBDCs) as more central banks around the world are taking concrete steps towards making digital currencies a reality.
There are now 87 countries looking at adopting a central bank digital currency, according to Atlantic Council CBDC tracker. These countries combined represent more than 90% of global GDP. This is a massive jump just from 35 countries exploring this option in May 2020.
Nine countries have already launched a digital currency, with Nigeria being one of the latest ones introducing the e-Naira.
Another 14 countries, including China and South Korea, are already in the pilot stages to prepare for an official launch.
The four largest central banks currently looking at a CBDC are the Fed, the ECB, Bank of Japan, and the BoE, with the U.S. central bank lagging behind the other three.
Out of the big players, China is at the forefront of CBDC development. The second-largest economy in the world completed its CBDC development in 2019 and is currently in the mass testing stage.
According to the People’s Bank of China (PBOC), there were 261 million unique users at the end of 2021, with a total of 87.5 billion yuan ($13.78 billion) worth of transactions made using the Chinese central bank digital currency.
At the beginning of January, China deployed its pilot versions of the digital yuan wallet application for Android and iOS.
“ will be forced upon the populace in China,” Piper Sandler analyst David Kroger said. “A result of a government that likes to control its people, a digital currency that watches every transaction made.”
