Central Bank Digital Currency (CBDCs) are concept-based centralized digital currency ideas that emerged following the introduction of stable coins as use cases in the cryptocurrency ecosystem. With the Digital Yuan, China is now leading the race for CBDCs.
The Bank of International Settlement Monetary Institute (BIS) has polled 81 Central Banks on their views on CBDCs and their intentions to deploy them. Approximately 90% of the participants stated that they are moving forward with CBDC-based projects.
Only half of the central bankers claimed they were working on CBDC development or doing “real experiments.”
Aside from the investigation and analysis on the Central Bank Digital Currency (CBDC) craze among Central Banks, the BIS indicated that stablecoins might play a significant role in the global payment service if they are backed by a specific type of fiat currency. Institutions, on the other hand, dismissed stablecoins supported by commodities or digital assets such as bitcoin.
BIS performed a similar poll in 2019 and discovered that 80 percent of central banks were working on implementing CBDC. Only 66 central banks participated in the survey.
At the time, the majority of banks stated that their involvement in CBDCs was solely for the purpose of ensuring payment security.
According to PwC’s 2022 CBDC Global Index, more than 80% of the world’s central banks are considering creating CBDCs.
Nigeria topped PWC’s global CBDC retail index, demonstrating the country’s effectiveness with digital currency deployment.
Despite the widely publicized early issues with the eNaira website, more than 700,000 eNaira fast wallets had been created within three months of its inception.
According to the index, there were more than 35,000 transactions using eNaira between October and December 2021, with the majority – 90 percent – being person-to-business and vice versa. This pattern indicates that the eNaira is often used in retail operations and transactions.
The performance of the eNaira is being closely monitored by African governments and central bank officials.
Nine African countries are now doing research in preparation for the implementation of digital currencies. The Atlantic Council’s Central Bank Digital Currency tracker lists seven of these countries: Kenya, Eswatini, Madagascar, Rwanda, Morocco, Ghana and Uganda.
Zambia and Tanzania have expressed interest in regulated digital money, despite not being listed, while Zambia and Kenya indicated earlier this year that they were examining the implementation and deployment of CBDCs.
Kenya’s central bank (CBK) regulator has released a discussion paper on digital money, asking for public feedback on its use in retail and cross-border operations.
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