It appears that nearly the entire global economy has now embraced the possibility of a cashless future. This follows after a new report from the U.S.-based research firm, the Atlantic Council, detailed that 134 countries are actively exploring central bank digital currencies (CBDCs) at the moment. This figure, which represents 98% of the global economy, marks a noticeable upgrade and gravitation towards digitized finance, showing that the world has come a long way from May 2020 when only about 35 countries were looking into CBDCs.
Interest in CBDCs Soars
The report shows that central banks around the world are in a race against time to bring their financial systems to modern standards. As of today, 66 countries have entered into the advanced stages of CBDC development. That is, they are no longer researching the concept and are now in the phase of development, pilot, or launch.
It might be worth noting that every G20 country is currently exploring a CBDC. However, 19 of them are already in the advanced stages. Of those, 13 countries, including Japan, India, Brazil, Turkey, and Russia, are already in the pilot stage.
Without a doubt, the situation across the board paints the picture that there is an ongoing shift in the way money is being managed and transferred globally.
Despite this widespread interest, though, only three countries, so far, have fully launched their own digital currencies. They are Nigeria, Jamaica, and the Bahamas in no particular order. These nations are now focusing on expanding the reach and adoption of their CBDCs within their domestic markets.
Geopolitical Implications
From all indications, the general push for CBDCs may not necessarily be solely about bringing payment systems to current global standards. As the recent report from the Atlantic Council implies, it may also hold significant geopolitical implications. BRICS nations, for instance, which include Brazil, Russia, India, China, and South Africa, are all piloting CBDCs as an alternative to the U.S. dollar in global trade.
While there was little to no activity regarding CBDCs in the immediate past, Russia’s invasion of Ukraine and the subsequent sanctions by the G7 has made it so that cross-border wholesale CBDC projects have now more than doubled.
