A new report from BIS presents the results of a survey of 86 central banks conducted in late 2022 about their involvement in central bank digital currencies work, as well as their motivations and intentions of potentially issuing one.
The survey also asked about central banks’ assessment of the use of stablecoins and other cryptoassets in their jurisdictions.
Over the course of 2022, the share of central banks engaged in some form of central bank digital currency (CBDC) work rose further, to 93%, and their uncertainty about short-term CBDC issuance is fading.
Work on retail CBDC is more advanced than on wholesale CBDC: almost a quarter of central banks are piloting a retail CBDC.
More than 80% of central banks see potential value in having both a retail CBDC and a fast payment system, mostly because a retail CBDC has specific properties and may offer additional features.
The survey suggests that there could be 15 retail and 9 wholesale CBDCs publicly circulating in 2030. More than 9 out of 10 central banks engage with other stakeholders when designing proofs of concept, pilots or live CBDCs.
The degree of that engagement and the type of entities involved differ between emerging market and developing economies (EMDEs) and advanced economies (AEs). They also differ by type of CBDC and the stage of work.
The survey further shows that, to date, stablecoins and other cryptoassets are rarely used for payments outside the crypto ecosystem. Some 60% of surveyed central banks reported that they have stepped up their CBDC work in response to the emergence of cryptoassets.
Central Bank Digital Currency Work Progresses
Over the course of 2022, work on CBDCs progressed further.
There are currently 4 central banks that have issued a live retail CBDC: The Bahamas, the Eastern Caribbean, Jamaica and Nigeria.
Although no new retail CBDCs were launched in 2022, there are probably more to come: 18% of central banks indicated in the survey that they are likely to issue a retail CBDC in the near term.
Various central banks published results of their CBDC experiments, including Sveriges Riksbank, the Federal Reserve Bank of New York, and the Reserve Bank of Australia, Central Bank of Malaysia, the Monetary Authority of Singapore and the South African Reserve Bank, in collaboration with the BIS Innovation Hub.
Moreover, in recent months, the Central Reserve Bank of Peru, the Hong Kong Monetary Authority, the Bank of England, the European Central Bank (ECB) and the Bank of Canada launched consultations or published progress reports detailing various aspects of potential digital versions of their local currencies.
Turbulent Markets
In 2022 and early 2023, crypto markets were turbulent.
In early May 2022, the crypto ecosystem was roiled by the failure of various cryptoasset providers, including TerraUSD, Terra’s (unbacked) stablecoin, which was the third largest stablecoin at the time.
The turmoil continued, and November saw the collapse of FTX, one of the largest crypto trading platforms.
Nearly 60% of respondent central banks said that the emergence of cryptoassets and stablecoins has accelerated their work on CBDCs.
Central banks and international standard-setting bodies have stepped up monitoring the implications of cryptoassets and are engaged in extensive international policy and standard-setting work to strengthen regulatory approaches to cryptoassets.
In July 2022, the Bank for International Settlements’ Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) published guidance on the application of the principles for financial market infrastructures (PFMIs) to stablecoins that are widely used for payments.
In October 2022, the Financial Stability Board (FSB) published a proposed framework for the international regulation of cryptoasset activities, and in December, the Basel Committee on Banking Supervision (BCBS) issued a prudential standard for the treatment of banks’ exposures to cryptoassets.
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