The Bank for International Settlements (BIS) has said that there could be up to 15 Central Bank retail digital currencies (CBDC) and eight wholesale CBDCs before the end of the decade.
The Swiss-based group, owned by 63 central banks, carried out a new survey about the growth of CBDCs and their role in the digital asset market.
According to the findings, 93% of central banks around the world have initiated research on CBDCs and more than 50% have gone a step further with concrete plans or working on a pilot project.
Of the 86 central banks interviewed by the BIS, it was concluded that 15 retail CBDCs are likely to be in circulation in financial markets by 2030.
“Global work on CBDCs has advanced even further. If issued, retail CBDCs can be expected to complement and coexist with other national payment methods.”
The report noted that certain countries, including India, the United Kingdom and European Union nations, have implemented plans to explore the sector in order to close the financial gap among the unbanked around the world.
Despite the increase in digital asset adoption leading large institutional investors and countries to draft regulatory frameworks, the survey noted that stablecoins and other virtual currencies are not used for many transactions outside of the crypto market.
The survey also confirmed previous analyst statements that cross-border remittances outpace the use of stablecoins outside of the crypto ecosystem.
CBDCs could boost adoption
In recent years, there has been a growing debate about the effect of CBDCs on traditional cryptocurrencies. Many opined that the growth of government-backed stablecoins nullifies the idea behind cryptocurrencies.
The digital asset creates a decentralized network that gives users the freedom of centralized control over their finances.
However, this report states that central banks see value in digital assets to support fast payments and link poorer communities through the blockchain.
Retail CBDCs are key in driving a sustainable adoption of digital assets with low-income individuals and small businesses in mind.
Last month the Bank of England released Rosalind’s test report highlights a template around a two-tier retail CBDC model that solves the centralization problem.
The model would see central banks create the infrastructure, while multiple financial institutions will create APIs with different functionality to allay fears of excessive centralization.
Remember that Ron DeSantis, the Governor of Florida, described CBDCs as a tool for surveillance by the government adding that his government would reject “wake up ideology” in the financial sector.
“protecting Floridians from the Biden administration’s weaponizing of the financial sector through a Central Bank digital currency.”