LONDON, March 14 (Reuters) – A total of 134 countries, representing 98% of the global economy, are currently considering digital versions of their currencies, with more than half in advanced development, testing or launch stages. That’s what a thorough investigation revealed on Thursday.
The study by the Atlantic Council, a US-based think tank, highlights that all G20 countries except Argentina are currently at one of the more advanced stages, but the US in particular is falling further and further behind. I’m taking it.
The report says that while a digital dollar that can only be sold “wholesale” by banks is still making incremental progress, a digital dollar for the broader U.S. population currently appears to be “stalled,” with the Federal Reserve Secretary of State Jerome Powell said this month that “something like that almost never happens.”
US President Joe Biden has ordered authorities to consider a digital dollar in 2022, but Biden’s Republican rival Donald Trump has vowed not to approve of it in this year’s US election campaign. It has become a polarizing political issue.
“The biggest headline here is that the divergence between the world’s largest central banks over CBDCs (central bank digital currencies) is widening,” said Josh Lipsky of the Atlantic Council. He pointed out how Europe and Japan are ahead of the curve.
Proponents argue that digital currencies enable new capabilities and provide an alternative to physical cash, which appears to be on its way out of decline. But they have also fueled protests in many countries over possible government snooping.
Lipsky added that the risk for the U.S. to fall behind is “further fragmentation of the international payments system,” adding that if other countries move forward with setting new standards around CBDCs, the U.S. will become a key player in global financial influence. He said there was a possibility of losing some.
Around 36 pilot projects, including e-CNY in China, which is being tested with 260 million people in 25 cities, and in Europe, where the European Central Bank (ECB) will take six months to “prepare” a digital euro. is currently in progress. The Bahamas, Jamaica and Nigeria are already fully operational, but the eight-nation Eastern Caribbean Currency Union (ECCU) recently made the switch first after an issue prevented users from accessing their digital wallets. I turned it off and opened a new tab. CBDC around the world
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The report also showed how wholesale CBDC efforts have doubled since Russia’s invasion of Ukraine in 2022 and the subsequent G7 sanctions response.
Currently, 13 cross-border wholesale projects are underway, including mBridge, which connects China, Thailand, the UAE, and Hong Kong, with plans to expand to a further 11 currently undisclosed countries this year.
BRICS countries such as Brazil, Russia, India, China and South Africa are all at advanced stages, and Lipsky said there will be a further push from the EU side for an alternative payment system to the dollar at a summit in Russia this year. I predicted it would be.
All of this will be part of a larger avalanche of policies by 2027, as well as the ECB, whose current pilot plan is seen as a potential blueprint for other major economies. There is a possibility.
China’s digital yuan remains the largest and most advanced pilot, although it is being trialled in a variety of scenarios, from public transport tickets and COVID-19 checks to purchasing oil and precious metals.
When will China fully launch e-CNY? “That’s the question,” Lipsky said. “Not this year, but 2025 or 2026? That’s hard to say.”
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Report by Mark Jones. Editing: Michael Perry
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