By Nathan Ferguson
The BIS (Bank for International Settlements) organized a survey that indicates that several central banks across the globe are taking measures to carry out the launch of a CBDC (central bank digital currency).
On Friday, in a published paper, it was stated by the BIS Monetary and Economic Department that 90% out of approximately eighty-one central banks that were surveyed between October and December of the previous year were involved in some processes related to CBDCs, while some pilot projects regarding CBDCs were being run by 26% of them and up to 60% were experimenting with a digital currency.
As per the BIS, the spike in interest regarding digital currencies, counting up to 83% a couple of years back, may have originated from a transformation into digital technology during the COVID-19 period along with the due to the cryptocurrencies including stablecoins. Throughout the world, up to a two-thirds majority of the central banks might find a way to launch a retail digital currency soon, as mentioned by the BIS.
Operations related to comprehensive CBDCs are thoroughly led by the factors connected to efficiency in making payments across borders. Central banks look at CBDCs as the powerful means having the potential of eliminating the chief hindrances like the limited working hours as witnessed in the present systems of payments as well as the stretch of the present transaction chains.
The paper referred to the rise of many CBDCs, commencing with the rollout of the Bahamian Sand Dollar a couple of years ago in October as well as the launch of the Nigerian eNaira a year after along with the expansion of the Chinese digital yuan as well as the Eastern Caribean DCash in 2021. As pointed out by the BIS survey, the central banks’ 70% is additionally delving into the CBDCs by having partnerships with the private sector as well as interoperability for the conventional systems of payment.
After a CBDC is completely established, the consumers can be offered a secure, rapid, as well as effective digital way of doing payments, as mentioned by Burkhard Balz (the executive board member at Deutsche Bundesbank) on Wednesday. The executive also noted that it would be advantageous if offline payments could be supported by CBDC. People would have an economic and digital substitute to be benefitted from.