The majority of countries are now accelerating toward building their Central Bank Digital Currency (CBDC) systems, and most of them are already nearing the finish line, according to new research. A report from the D.C.-based think tank Atlantic Council says that 130 countries representing 98% of the world’s gross domestic product (GDP) are exploring a CBDC, up from only 35 countries that were considering a CBDC in May 2020.
A new high of 64 nations are now in an advanced phase of exploration – development, pilot, or launch – of a CBDC system. These countries include 19 of the G20 nations. The Atlantic Council says that the US is something of an exception to the trend, with the development of a retail CBDC currently “stalled,” though progress is being made with a bank-to-bank CBDC.
“However, other G7 banks, including the Bank of England and the Bank of Japan are developing CBDC prototypes and consulting the public and private sectors on privacy and financial stability issues. The US is, however, moving forward on a wholesale (bank-to-bank) CBDC. Since Russia’s invasion of Ukraine and the G7 sanctions response, wholesale CBDC developments have doubled. There are currently 12 cross-border wholesale CBDC projects.”
The report says that over 20 countries will begin taking steps to pilot their CBDCs this year. India and Brazil, both BRICS nations, plan to launch their systems in 2024. Peter Goettler, president of the Cato Institute, recently issued a warning about the rise of CBDCs and their potential to both restrict freedom and give governments and central banks too much power.
Goettler, who has been president and CEO of the libertarian think tank since 2015, says CBDCs are a direct response to the rise of cryptocurrencies.
“Cryptocurrencies also provide the ability to transact outside of the traditional financial sector and with more privacy. In response to the popularity of this innovation, governments are pursuing the exact opposite: more centralization, surveillance and control…
CBDCs are being developed precisely because they provide governments with increased control and power. This kind of threat to individual rights will naturally drive people toward private solutions, while governments are sure to work hard to thwart such alternatives since they undermine the increased government control and power CBDCs create.”