The Bank for International Settlements (BIS) conducted a new study, according to the results of which the growth of the popularity of digital currencies of the central bank (CBDC) was recorded.
On Monday, July 10, this financial institution published the results of a survey, according to which currently the share of central banks participating in CBDC projects is 93%. This indicator indicates the growing popularity of virtual money. The bank also reports that the survey showed a decrease in the level of uncertainty about the short-term issue of new-generation money.
BIS claims that if current trends continue, by 2030 there will be 15 retail and 9 wholesale digital currencies of central banks in the field of public circulation. The bank also notes that the work on retail CBDCs demonstrates greater progress compared to projects related to wholesale coins.
BIS states that wholesale CBDCs will allow financial institutions to gain access to new functionality provided by tokenization, including programmability and composability.
Experts say that tokenized deposits are attracting more and more interest in the field of banking. For example, the Deputy governor of the Bank of England, Sir John Cunliffe, in April, during a speech at the global Innovate Finance summit, which was held in the UK, said that deposits of this category partially or completely provide the level of functionality and efficiency that are characteristic of stablecoins. According to him, this feature allows bank deposits to fully compete with non-bank payment coins.
Rob Hunter, former Deputy General Counsel and Director of Regulatory and Legislative Affairs at The Clearing House (TCH) said in an interview late last year that there was no reason why financial institutions could not get permission to use new technologies to perform functions that concern the banking business.
BIS reports that four central banks have already issued CBDC for retail in real-time. A new generation of currency has appeared in everyday use in the Bahamas, the Eastern Caribbean, Jamaica, and Nigeria.
Last year, no new retail CBDC was launched, but there are harbingers of positive dynamics in this matter. During the survey, 18% of banks reported their intention to issue the corresponding currency in the near future.
Some banks continue to explore the feasibility of using digital money. For example, the US Federal Reserve last week published the results of its research on this topic, containing a conclusion about the likelihood that a new generation currency will improve cross-border and domestic payments.
BIS also states that the interest in CBDC may be related to recent collapses in the field of cryptocurrencies, including the situation with FTX, and bankruptcies in the banking sector, the most famous among which are failures of Silicon Valley Bank and Signature Bank.
BIS data indicates that 60% of central banks have accelerated work on CBDC amid the emergence of stablecoins and other crypto assets.
As we have reported earlier, Swiss National Bank Preps Wholesale CBDC Test.