One-Third of Central Banks Postpone CBDC Rollouts: What It Means for the Future of Digital Currency

One-Third of Central Banks Postpone CBDC Rollouts: What It Means for the Future of Digital Currency

In recent developments surrounding the future of digital currencies, the Federal Reserve’s extensive research has faced a significant hurdle. Former President Trump has taken decisive action against the creation of a digital dollar by issuing an executive order that halts any government efforts to establish, issue, or promote Central Bank Digital Currencies (CBDCs). This move has sent ripples through the global financial community, prompting a closer examination of central banks’ plans for CBDCs.

Global Central Banks’ Perspectives on CBDCs

Amidst this political backdrop, a recent survey conducted by Giesecke+Devrient in collaboration with the think tank Omfif reveals insights from 34 central banks worldwide. The findings indicate a robust interest in CBDCs:

  • 75% of central banks still plan to issue a CBDC.
  • Over half of the respondents are allocating more internal resources to this initiative.
  • The percentage of those expecting to launch a CBDC within the next three to five years has increased to 34%, up from 26% in 2023.

Shifts in CBDC Strategies

Despite the optimistic outlook, there are emerging trends that suggest a cautious approach:

  • 15% of respondents report being less inclined to issue a CBDC, a notable increase from zero percent in 2022.
  • 31% have postponed their issuance timelines due to legislative hurdles and the need to explore a broader range of payment solutions.

One anonymous respondent noted a shift in focus, stating they would be reducing efforts on CBDC research to prioritize other payment issues. Another expressed the need to progress in regulations and market developments before moving forward with CBDCs.

Technical Advancements and Motivations

Significant strides have been made in addressing the technical requirements for issuing CBDCs. Key developments include:

  • Overcoming challenges associated with offline payments.
  • Improving user experience as a top priority.
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The motivations behind exploring CBDCs vary between emerging and developed markets:

  • Emerging market central banks are primarily driven by financial inclusion.
  • Developed market central banks focus on preserving monetary sovereignty.

For more detailed insights, you can read the full report from Omfif.

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