According to a highly watched research released on Thursday, 134 nations, or 98% of the world’s economy, are currently investigating digital versions of their national currencies, with more than half of them in advanced development, pilot, or launch stages.
According to research by the US-based Atlantic Council think tank, all of the G20 nations—aside from Argentina—are currently experiencing one of those protracted stages, but the US is particularly lagging behind.
A digital currency for the entire US population now seems “stalled,” according to the article, despite progress toward a digital dollar for banks only remaining slow. Federal Reserve Chairman Jerome Powell stated earlier this month that “nothing like that is remotely close to happening.”
US President Joe Biden gave the order for officials to investigate the possibility of a digital dollar in 2022, but Biden’s Republican opponent in this year’s US presidential contest, Donald Trump, has promised to oppose it, turning the subject into a contentious political issue.
Josh Lipsky of the Atlantic Council stated, “The biggest headline here is that the divergence between the world’s largest central banks over CBDCs (Central Bank Digital Currency) is growing,” highlighting how much more advanced China, Europe, and Japan were.
Proponents claim that digital currencies will open up new possibilities and offer a substitute for currency, which is dying. However, they have also fueled protests over possible government spying in several other countries.
“A more fractured international payments system” is the risk of the US falling behind, according to Lipsky, who also noted that Washington might lose some of its influence in global banking if other nations go forward and establish the new guidelines around CBDCs.
There are currently 36 pilot programs in operation, such as China’s e-CNY, which is being tested by 260 million people in 25 cities, and the European Central Bank’s (ECB) six-month-long “preparation” work for the digital euro.
Although the Eastern Caribbean Currency Union (ECCU), which is made up of eight countries, recently became the first to turn one off after issues prevented users from accessing digital wallets, the Bahamas, Jamaica, and Nigeria already have theirs fully operational.
Divided World
The paper also demonstrated how, following Russia’s invasion of Ukraine in 2022 and the ensuing G7 sanctions response, activity on wholesale CBDCs had increased.
There are presently thirteen cross-border wholesale projects in progress, one of which is called “mBridge” and connects China, Thailand, the United Arab Emirates, and Hong Kong. This year, it will also expand to eleven more as-yet-unnamed countries.
The BRICS countries—Brazil, Russia, India, China, and South Africa—are all advanced, and Lipsky forecast that the group will push for non-dollar payment methods at this year’s conference in Russia.
The paper also demonstrated how, following Russia’s invasion of Ukraine in 2022 and the ensuing G7 sanctions response, activity on wholesale CBDCs had increased.
There are presently thirteen cross-border wholesale projects in progress, one of which is called “mBridge” and connects China, Thailand, the United Arab Emirates, and Hong Kong. This year, it will also expand to eleven more as-yet-unnamed countries.
The BRICS countries—Brazil, Russia, India, China, and South Africa—are all advanced, and Lipsky forecast that the group will push for non-dollar payment methods at this year’s conference in Russia.
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