A recent survey conducted by the Bank for International Settlements (BIS) has revealed that the majority of central banks around the world are not planning to issue retail versions of central bank digital currencies (CBDCs) in the near future. The survey found that only 12% of central banks are considering issuing retail CBDCs in the medium term.
The BIS survey results indicate that central banks are more likely to issue wholesale CBDCs in the next six years, with nine wholesale CBDCs expected to be in circulation by the end of the decade. The main reason for central banks’ interest in wholesale CBDCs is to improve cross-border payments, addressing issues such as high costs, slow transaction speeds, limited access, and lack of transparency.
On the other hand, when it comes to retail CBDCs, more than half of the surveyed central banks are still exploring the possibility. Regulators are focusing on clarifying key aspects such as holding limits, interoperability, offline usability, and remuneration policies for retail CBDCs.
Central banks are particularly interested in wholesale CBDCs because they offer new functionalities enabled by tokenization, such as composability and programmability. This could potentially revolutionize the way financial institutions operate and interact with digital assets.
While retail CBDCs are not a top priority for most central banks at the moment, the survey results suggest that there is ongoing interest in exploring the potential benefits and challenges associated with issuing a retail version of a digital currency. It is clear that central banks are carefully evaluating the implications of introducing retail CBDCs and are taking a cautious approach to ensure a smooth transition if and when they decide to proceed with their development and implementation.
Overall, the BIS survey highlights the evolving landscape of central bank digital currencies and the different approaches that central banks are taking towards their development. It will be interesting to see how these trends continue to unfold in the coming years and whether retail CBDCs will become a more widespread reality in the future.