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Eighty one nations are exploring central bank digital currencies

According to a new tracker from The Atlantic Council, 81 countries — making up 90% of the world’s economy — are exploring central bank digital currencies (CBDCs). Five countries have already launched, while another 14 (including China) are currently testing pilot currencies. Where in the world are CBDCs rolling out? And what do they mean for the future of money? Let’s dig in.

According to a new tracker from The Atlantic Council, 81 countries — making up 90% of the world’s economy — are exploring central bank digital currencies (CBDCs). Five countries have already launched, while another 14 (including China) are currently testing pilot currencies. Where in the world are CBDCs rolling out? And what do they mean for the future of money? Let’s dig in.

  • CBDCs are a completely digital version of government-issued money. Unlike Bitcoin, CBDCs are centralized legal tender, created and controlled by a government or central bank. Like Bitcoin, they can be used for fast (even real-time) and inexpensive payments, worldwide.
  • Five countries, clustered in the Caribbean, have fully launched CBDCs: The Bahamas, Saint Kitts and Nevis, Antigua and Barbuda, Saint Lucia, and Grenada. Fourteen nations, including China, Sweden, and South Korea, are currently testing pilot currencies.
  • The number of countries working on CBDCs doubled during the pandemic. As crypto gained steam and COVID revealed new use cases for digital currencies — from contactless payments to the distribution of stimulus funds — funding for CBDC research spiked.
  • China is poised to become the first major economy to fully roll out a CBDC. Even though the digital yuan is still in its pilot phase, it’s already being used for transportation, meals, and more in parts of the country.
  • Visitors to China will also be able to use the digital yuan without having to open a bank account. Though it’s not clear when this feature will be available, some U.S. lawmakers have already discouraged Americans from using it during the 2022 Beijing Winter Olympics, citing privacy concerns.
  • The U.S. digital dollar is still in the research phase. At least two prototypes are almost ready to unveil, led by MIT’s Digital Currency Initiative and the Federal Reserve Bank of Boston.
  • There’s still a lot of uncertainty about how a CBDC would work in the U.S. The director of MIT’s research effort, Neha Narula, listed some key unknowns around privacy, distribution, and offline access in a CNBC interview: “If there is a digital dollar, privacy is going to be a very, very important part of that.”

Why does it matter… The CBDC narrative is often framed around opposing camps — “the U.S. vs. China,” for instance, or “crypto vs. CBDCs.” But many experts see both CBDCs and crypto as part of the global financial system’s larger journey toward a cashless future. As MIT’s Nerula told the Unchained podcast: “They will coexist and there’s use cases for both.” One potential outcome? The innovation happening in both CBDCs and crypto could make the entire financial system faster, more innovative, and more equitable.