CBDCs: Which countries are using, launching or piloting their own digital currencies?
Digital currencies have been surging in popularity over the last few years as cryptocurrencies like Bitcoin have entered the mainstream and captured millions of people’s imagination.
This rise has also turned the heads of the world’s central banks as fears grow that domestic currencies could be undermined by their growth.
In response to these fears, central banks around the world have been investigating the practicalities of creating their own digital currencies.
Almost 100 countries are actively evaluating central bank digital currencies (CBDCs), according to the IMF, and some have already started rolling them out.
A CBDC is essentially electronic cash. Like traditional fiat currencies, it gives holders a direct claim on the central bank and allows businesses and individuals to make electronic payments and transfers.
It cuts out the middlemen in financial transactions - primarily banks - and allows transactions to travel directly from person to person or customer to vendor.
This helps to eliminate risks to the consumer, such as the collapse of a commercial bank, and creates a direct connection between consumers and a central bank.
The growing popularity of crypto led central banks to fear losing control over the supply of money and payments systems. The spread of forms of payment not overseen by any central or public body could weaken central banks' grip on the supply of money, and economic stability.
The idea of CBDCs comes from cryptocurrencies like Bitcoin or Ethereum. However, there are differences. Cryptos are unregulated and decentralised. They are volatile as their value is based on investors, usage and speculation. This volatility can be seen in the swings in value of Bitcoin over the last 12 months. CBDCs’ value is
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