Visualized: The State of Central Bank Digital Currencies
Central banks around the world are getting involved with digital currencies, but some are more advanced than others.
In this map, we’ve used data from the Atlantic Council’s Currency Tracker to visualize the status of each central bank’s digital currency effort.
Digital Currency – The Basics
Digital currencies have been around since the 1980s, but only became very popular with the launch of Bitcoin in 2009. Today, there are thousands of digital currencies, also known as “cryptocurrencies”.
A defining characteristic of cryptocurrencies is that they are based on a blockchain ledger. Blockchains can be decentralized or centralized, but today’s most well-known cryptocurrencies (Bitcoin, Ethereum, etc.) tend to be decentralized in nature. This makes transfers and payments very difficult to trace as there is no single entity with full control.
Government-issued digital currencies, on the other hand, will be controlled by a central bank and will likely be easily traceable. They would have the same value as local currency, but would instead be issued digitally without physical form.
Digital currencies of central banks around the world
105 countries are currently exploring centralized digital currencies. Together they represent 95% of global GDP. The table below lists the data used in the infographic.
|Saint Kitts and Nevis||Spear||Detail|
|Antigua and Barbuda||Spear||Detail|
|Saint Vincent and the Grenadines||Spear||Detail|
|United Arab Emirates||Pilot||Wholesale|
|United States||To research||Detail|
|Trinidad and Tobago||To research||Undecided|
|Czech Republich||To research||Undecided|
|New Zealand||To research||Detail|
Once aggregated, we can see that the majority of countries are in the to research arrange.
We’ve also split the map by region for easier viewing.
What are the benefits?
One of the main benefits of government-issued digital currencies is that they can improve access for the underbanked.
This is not a major problem in developed countries like the United States, but many people in developing countries do not have access to banks and other financial services (hence the term underbanked). As the number of Internet users continues to climb, digital currencies represent a sensible solution.
For more on this topic, check out this article from Global Finance, which lists the most underbanked countries in the world in 2021.
To date, only 9% of countries have launched a digital currency.
This includes Nigeriawhich became the first African country to do so in October 2021. Half of the country’s 200 million people are said to have no access to bank accounts.
Adoption of eNaira (the digital version of the naira) has so far been relatively slow. The eNaira app has racked up 700,000 downloads in April 2022. This equates to 0.35% of the population, although not all uploads are users in Nigeria.
Conversely, 33.4 million There have been reports of Nigerians trading or owning crypto assets, despite attempts by the Central Bank of Nigeria to restrict usage.
Status in the United States
The US central bank, the Federal Reserve, has not decided whether it will implement a central bank digital currency (CBDC).
Our primary focus is whether and how a CBDC could improve an already secure and efficient US domestic payments system.
– Federal Reserve
To learn more, see the Federal Reserve’s January 2022 paper on the pros and cons of CBDCs.
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