Digital money will be the future, said PwC recently when releasing its 2022 PwC Central Bank Digital Currency (CBDC) Global Index.
“It’s estimated that more than 80% of central banks are considering launching a central bank digital currency,” the company noted in a statement.
The 2022 PwC CBDC Global Index analyzes and ranks the leading retail and wholesale CBDC projects, according to PwC, adding that the Index evaluates the current stage of CBDC project development also taking into account central bank opinion and public interest.
China became the first major economy to pilot a CBDC in 2020 with the digital yuan, and as of March 2022 pilot programs are running in 12 cities, including Beijing and Shanghai, PwC said.
Overall, retail CBDC projects (digital currencies designed for public use) have reached greater maturity levels than wholesale projects (digital currencies used by financial institutions that have accounts with central banks), but the past year has seen progress on a number of successful wholesale pilots, the firm observed.
Retail projects in the Index are led by the Central Bank of Nigeria’s (CBN) eNaira, the first CBDC in Africa, and the Sand Dollar, issued by the Central Bank of the Bahamas as legal tender in October 2020, making the Bahamas the first country to launch a CBDC, PwC said.
On the wholesale side, the leading project in the Index is the combined effort of the Hong Kong Monetary Authority (HKMA) and the Bank of Thailand (BoT) to launch the mBridge project, focused on developing a proof-of-concept prototype to enable real-time, cross-border foreign exchange payments on distributed ledger technology, the firm pointed out.
Also ranked highly is the work of the Monetary Authority of Singapore (MAS), with two new CBDC projects, as it continues the development of a wholesale CBDC for cross-currency payments, PwC added.
This year’s Index shows that central banks are ramping up activity in the digital currency space, Haydn Jones, Blockchain & Crypto Specialist, PwC UK said.
Countries are at differing levels of maturity with CBDCs and each country has different motivating factors. Increasing financial inclusion, facilitating cross border payments and controlling financial crime are all factors that come into play, he added.
“We expect CBDC research, testing and implementation will intensify in 2022,” Jones noted.
