The adoption of central bank digital currencies (CBDC) in emerging economies has been faster than in developed countries. So far, 11 developing countries have launched or are testing CBDCs, while only eight developed countries are conducting pilots. 

Emerging Economies More Interested in CBDCs

CoinGecko analysts report that developing countries are moving faster towards CBDCs than developed countries. They came to such conclusions after analyzing the Atlantic Council statistics.

Currently, 11 emerging economies have already launched or are testing the central bank digital currency. For example, the digital naira (eNaira) is already actively used in Nigeria to pay for goods and services, including contactless payments. The digital currency is also already issued in the Bahamas and Jamaica. 

Meanwhile, eight countries with large economies are only continuing to explore the potential of CBDCs, not planning to release them soon. For instance, the authorities of South Korea, Japan, and Canada are carrying out pilot tests. Only one country is close to the full release of a CBDC in the near future — China, whose authorities are actively expanding the e-CNY capabilities.

On the other hand, most of the world’s major economies are still studying the possible effects of CBDC issuance on the local banking system and monetary policy and can’t even decide on the final structure of the pilot projects. Such countries as the U.S. and the U.K. are still at the research stage, although they recognize the necessity and effectiveness of the technology.

CoinGecko analysts explained this discrepancy in the level of interest in CBDCs by the fact that countries with developing economies consider the state digital currency as a tool to expand access to financial services, which isn’t a problem for countries with developed economies. However, the authorities of large countries express skepticism about the technology because the digitalization of the economy may have a stronger negative impact on their financial system, creating extra risks for it.

According to the latest data, 93% of the world’s central banks are studying CBDCs in one way or another.

Author: Molly Wilson
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