Central Bank Digital Currencies (CBDCs) Worldwide

In a previous post, we looked at wcentral bank digital currenciescentral bank digital currencieshen the US might institute a Central Bank Digital Currency (CBDC). President Trump has deferred the previous administration’s executive order to further their development. However, many other countries around the world are pushing forward with making CBDCs a reality. Some countries have even implemented them. What might that mean for you? Let’s get into it.

Why should I care about what is happening with CBDCs?

CBDCs are poised to change the way we interact with money globally. Unlike cash, CBDCs are easily traceable, raising privacy concerns. CBDCs, like cryptocurrencies, rely on a blcokchain, which keeps a public log of every transaction. With cryptocurrencies, users often employ pseudonyms, which can maintain a users privacy. However, we’ll have to see if officially issued CBDCs will also include privacy protections. Privacy may be limited as any country would want to monitor the use of their CBDC at the very least to ensure no illegal transactions were taking place.

Further, CBDCs are poised to lead to the elimination of cash. Physical money costs money to create. Recently, the US ended the minting of pennies as they cost 3.7 cents each to make. New scrutiny may turn to the nickel as it costs upwards of 13 cents to mint. Other monies are more economical to make, but eliminating them may become a way for the country to save money, no pun intended.

So who in the world has CBDCs?

According to the CBDC Tracker, Jamaica, The Bahamas, and Nigeria are the only countries that have officially launched a full version of their CBDC. Additionally, 24 countries are working on a pilot, 30 have a proof of concept, and 108 countries are researching how to implement CBDCs. Nine countries, including the United States, have canceled their efforts.

The CBDC Tracker utilizes the following definitions for each status:

Cancelled Countries that cancelled or decommissioned a CBDC.
Research Countries that have conducted first explanatory CBDC research.
Proof of Concept Countries that are in an advanced research stage and have published a CBDC proof of concept.
Pilot Countries that have developed a CBDC that is tested in a real environment either with a limited number of parties or on a wide scale.
Launched Countries that officially fully launched a CBDC.

Source: CBDC Tracker

As we see CBDCs around the world take off, we need to keep in mind how that will affect our everyday lives. As the world is gets smaller and more interconnected, a CBDC in another country may affect how we buy, sell, and share.