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Central banks representing a fifth of world’s population likely to issue CBDC in 3 years: BIS

According to the latest report by the Bank for International Settlements, Central bank digital currencies (CBDCs), are entering the “advanced stages” of engagement as nations around the world look to capitalize on blockchain technology.

In its latest survey of CBDC development, the BIS indicates that central banks representing nearly a fifth of the world’s population are set to introduce a “general purpose CBDC in the next three years.”

As reported by Cointelegraph, the 23-page document is based on primary consultations with more than 60 monetary authorities conducted in late 2020.

The survey shows that 86% of global central banks are actively exploring CBDCs. While the majority remain unlikely to issue a digital currency in the near future, a sizable minority are moving ahead.

Nearly 60% of central banks are experimenting with digital currencies, while 14% are moving forward with development and pilot programs.

“Around the globe, interest in CBDCs continues to be shaped by local circumstances,” said authors Codruta Boar and Andreas Wherli. “In emerging market and developing economies, where central banks report relatively stronger motivations, financial inclusion and payments efficiency objectives drive general purpose CBDC work.”

The United States Federal Reserve is one of the monetary authorities actively researching CBDCs. 

The BIS authors conclude:

“Most central banks are now exploring the case for CBDCs in some way and, overall, the survey indicates a continuous move from purely conceptual research to experimentation and pilot projects. Yet despite these developments, a widespread roll out of CBDCs still seems some way off.”

In prepared remarks released alongside the report, BIS general manager Agustin Carstens stated that CBDCs can “serve as the basis for well functioning payments,” but only when accompanied with “good law enforcement.” Anonymous tokens “will not fly,” he said.

Carsten also stated that CBDCs without attached identity would elevate money laundering concerns, undermine efforts to boost financial inclusion and contribute to cross-border instability.

He added:

“If they are properly designed and widely adopted, CBDCs could become a complementary means of payment that addresses specific use cases and market failures. They could act as a catalyst for continued innovation and competition in payments, finance and commerce at large.”

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