🏦 [Analysis] Proceeding with caution – a survey on central bank digital currency - Christian Barontini and Henry Holden

A Bank of International Settlement survey, which covers 80% of global population and 90% of economic output, shows that 70% of central banks are investigating central bank digital currencies (CBDCs). Central bank digital currencies come in two forms: wholesale, for inter-bank or securities settlements, and general, for all other transactions like the e-Peso. Of this 70%, half are working on CBDCs of both types, one third is focusing on a general purpose CBDC, and an eighth solely on wholesale. Half of the investigating central banks, furthermore, have moved onto Proof-of-Concepts, yet few are moving onto development of operational CBDCs. 85% of investigating central banks are unlikely to launch a CBDC in the next decade. BIS analysis correlates lack of development with poor understanding of legal frameworks concerning digital currency issuance and general cost/benefit analysis. According to the survey, payment safety and domestic efficiency are the top motivations for a a general purpose and wholesale CBDC respectively. Regardless of these motivations, the general stance of central banks on digital currency issuance is one of skepticism, collaboration, and caution.