According to an analysis by BanklessTimes.com, the number of countries with central banks working on CBDC has increased from 35 in 2020 to 105 this year. This represents a 200% increase in two years.
Speaking on the data, Jonathan Merry, CEO of BanklessTimes, said. “CBDCs have the potential to reduce costs, increase efficiency and speed up transactions. They could also help reduce financial crime. However, many challenges must be overcome before CBDCs can be widely adopted. These include technical challenges, such as ensuring interoperability between different systems, and regulatory challenges, such as preventing money laundering and terrorist financing.”
What is CBDC?
CBDC is a digital version of a country’s fiat currency. It can be used to make electronic payments and can be exchanged for other assets, such as gold or cryptocurrency. There are several benefits of CBDC. First, it can help to reduce fraudulent activities. Second, it can help to reduce the cost of printing physical money.
Third, it can help to increase financial inclusion by providing access to banking services to those who do not have a bank account. Some risks associated with CBDC include the potential loss of control by the central bank, increased volatility, and cyberattacks.
Which Countries Are Considering or Have Already Launched CBDC?
So far, ten countries have fully released a CBDC, with China expanding its test program to 2023. In October 2021, Nigeria, Africa’s most populous country, introduced the CBDC. Besides, the JAM-DEX CBDC was recently introduced in Jamaica.
Impact of CBDCs Adoption
CBDCs wide adoption radically alters the global monetary system. With its advent, citizens and enterprises have direct access to a digital currency backed by assets owned by central banks.
Banks function as an intermediary between governments and businesses in investment and savings. So, the financial sector will experience strong effects.
In automated electronic contracts, CBDC could affect a company’s treasury policies. Moreover, it presents new options for integrating payment systems with management software and supply chain resources. The full story and statistics can be found here: Central Bank Digital Currency Adoption Among Countries Record a 200% Jump in the Last Two Years