Momentum for the central bank’s digital currency is growing, a Reuters study shows

By Marc Jones

LONDON (Reuters) – A total of 134 countries, representing 98 percent of the global economy, are now exploring digital versions of their currencies, with almost half at an advanced stage and pioneers such as China, the Bahamas and Nigeria starting to see a rise in of use. .

Research by the US Atlantic Council think tank, published on Tuesday, showed that all G20 countries are now looking at central bank digital currencies (CBDCs) as they are known, and that 44 countries in total are piloting them.

That’s up from 36 a year ago and is part of a global push by authorities to respond to declining cash use and the threat to their money-printing powers from companies like bitcoin and “Big Tech” .

Josh Lipsky and Ananya Kumar of the Atlantic Council said that one of the most notable developments this year has been the significant growth of CBDCs in the Bahamas, Jamaica and Nigeria, the only three countries that have already launched them.

China, which is running the world’s largest pilot scheme, has also seen use of its e-CNY prototype nearly quadruple to 7 trillion yuan ($987 billion) in transactions, according to officials.

“There has been a narrative that countries that have launched CBDCs have seen low or no uptake, but in recent months we’ve seen real uptake,” Lipsky said.

“My prediction is that the PBOC (central bank of China) will be close to full rollout in a year,” he added.

Other major developments were the European Central Bank launching a multi-year digital pilot and the United States, which has long been pushing for a digital dollar, joining a cross-border CBDC project with six other major central banks.

It still lags behind almost every other leading bank, yet Lipsky pointed out that it is one of the countries where privacy and other concerns about CBDCs are the most vocal.

In May, the US House of Representatives passed a bill that would ban the direct issuance of a “retail” CBDC — the type used by the public. The Senate has yet to act, but it remains a live issue in the presidential election campaign between Donald Trump and Kamala Harris.

Since Russia’s invasion of Ukraine and the response to G7 sanctions, bank-to-bank “wholesale” CBDC projects have more than doubled in number to 13.

The fastest-growing, codenamed mBridge, connects CBDCs in China, Thailand, the United Arab Emirates, Hong Kong and Saudi Arabia, and is expected to expand to more countries this year.

Russia is unlikely to be one of them, but its digital ruble pilot means it is now accepted on the Moscow metro and at some petrol stations. Iran is also working on a digital rial.

“No matter what happens with the US election, the Fed is years behind,” Lipsky said.

(1 USD = 7.0930 renminbi)