93% and Rising: The Inevitable Wave of Central Bank Digital Currencies: An Outlook for 2030

The world is going through a digital revolution. A significant piece of this evolving puzzle lies in the realm of finance, specifically with Central Bank Digital Currencies (CBDCs). In simple terms, a CBDC is a digital form of a country’s currency, managed and issued directly by the nation’s central bank.

This move towards digital currency is not just a trend, but a massive shift, and the 2022 survey results underline the extensive groundwork being laid for this transition.

What stands out in these findings is the sheer number of central banks — a staggering 93% — that had engaged in developing their CBDCs during 2022.

When you consider that these banks represent nations across the globe, it’s clear to see how broad and far-reaching this movement is.

As we look at the current state of play, four trailblazers have emerged, with the Bahamas, the Eastern Caribbean, Jamaica, and Nigeria having already launched their own live retail CBDCs. It’s an exciting development, but they are just the first wave. The momentum is building, with an increase in the number of central banks intending to issue their retail CBDCs within the next three years, up from 15% to 18%.

The value of these digital currencies is not confined to the retail sector. The survey also found that over 80% of central banks are eyeing the potential of both retail and wholesale CBDCs. This dual-pronged approach allows for both public and interbank transactions, optimizing their potential reach and utility.

What does the future hold for CBDCs?

The survey provides a compelling prediction: by the year 2030, we could see as many as 15 retail and 9 wholesale CBDCs in circulation. This evolution paints a picture of a future where digital currencies are a norm, not an exception.

The motivations driving central banks’ interest in CBDCs are varied, yet one common theme is the enhancement of cross-border transactions. For instance, the Project Dunbar initiative is an example of this focus on improving international payments.

This joint project, with participants including the Reserve Bank of Australia, the Central Bank of Malaysia, the Monetary Authority of Singapore, the South African Reserve Bank, and the BIS Innovation Hub, aims to create a shared platform for multiple CBDCs. The intended outcome is faster, cheaper, and more secure cross-border transactions — a clear win in our increasingly globalized world.

A strong emphasis on collaboration stands out in this new era of digital currencies. Almost all central banks engaged in CBDC development or trials, a whopping 93%, are consulting or collaborating with other stakeholders. This cooperative approach is shaping the design and implementation of these digital currencies, providing valuable insights and considerations.

In conclusion, we are at the brink of a financial revolution. The development of CBDCs by central banks worldwide presents an exciting transformation, promising to reshape how we understand and perform financial transactions. As we inch closer to 2030, we can expect digital currencies to take a more central role in global financial systems.