BIS study shows positive outlook on retail CBDC issuance

For this survey, the Bank of International Settlements (BIS) surveyed 86 central banks. According to the findings, 93% of them are currently working on their own CBDCs, with major jurisdictions such as India, the UK and the European Union all seriously exploring issuing a digital version of their fiat currencies. 

In essence, the report shows that global work on CBDCs has been making good progress when compared to 2022. CBDCs are taken more seriously in emerging economies, where these types of digital assets could potentially help the unbanked. If issued, retail CBDCs are expected to complement existing currencies and not replace them. The report also indicates that, outside of the crypto ecosystem, stablecoins and other crypto assets are rarely used for payments. Instead, these assets are mostly used in cross-border remittances and for consumer purchases. 

While the report’s key finding is that around 15 retail central bank digital currencies (CBDCs) could be in circulation across the world by the decade’s end, the BIS also found that nine central banks are likely to issue a CBDC for wholesale use in financial markets within the next six years.

CBDC initiatives around the world 

In 2023, several financial institutions have been working on CBDC projects in some form or another, whether we’re talking about pilot programmes, platform developments, or regulatory efforts. 

In June 2023, the Associazione Bancaria Italiana (ABI) partnered with the Bank of Italy to bring together a group of banks in a pilot program for a central bank digital currency. Named Project Leonidas, this initiative involves 18 commercial banks leveraging blockchain technology. The primary objective is to explore blockchain applications that promote financial stability and protect consumers. 

In the same month, Singapore's central bank announced it will be analysing different ways to design open, interoperable networks for tokenized digital assets. The Monetary Authority of Singapore (MAS) presented the framework in a report produced in collaboration with the Bank for International Settlements and other financial institutions.

The initiative, called Project Guardian, has enlisted 11 institutions to test asset tokenization across financial asset classes. Pilot studies across wealth management, fixed income and foreign exchange will be carried out by banking entities such as HSBC, Standard Chartered, DBS and Citi according to the official press release.