By Mark Jones
LONDON (Reuters) – A total of 134 countries representing 98% of the global economy are now considering digital versions of their currencies, with nearly half at an advanced stage and pioneers such as China, the Bahamas and Nigeria seeing a resurgence in use.
Research by the US-based Atlantic Council think tank, published on Tuesday, showed that all G20 countries are now looking at central bank digital currencies (CBDCs), as they are known, with 44 countries in total experimenting with them.
That’s up from 36 percent a year ago, and is part of a global push by authorities to respond to declining use of cash and the threat to their money-printing capabilities from the likes of Bitcoin and “big tech.”
One of the most notable developments this year has been the surge in central bank digital currencies in the Bahamas, Jamaica and Nigeria, the only three countries to have actually launched them, said Josh Lipsky and Ananya Kumar of the Atlantic Council.
China, which runs the world’s largest pilot scheme, has seen use of its prototype e-currency quadruple to 7 trillion yuan ($987 billion) in transactions, according to officials.
“There was a narrative that countries that launched CBDCs saw low or no usage, but in recent months we have seen real uptake,” Lipsky said.
“My expectation is that the People’s Bank of China (the central bank) will be close to full launch within a year from now,” he added.
Other major developments included the European Central Bank launching a multi-year pilot project for a digital euro, and the United States, which had long been slow to adopt a digital dollar, joining a cross-border central bank digital currency project with six other major central banks.
It still lags far behind almost every other leading bank, but Lipsky highlighted that it is one of the countries where privacy and other concerns about CBDCs are most pronounced.
In May, the U.S. House of Representatives passed a bill that would ban the direct issuance of a “retail” central bank digital currency — the kind used by the general public. The Senate has yet to act, but the issue remains a live issue in the presidential election campaign between Donald Trump and Kamala Harris.
Since Russia’s invasion of Ukraine and the G7 response to sanctions, the number of “wholesale” interbank crypto projects has doubled to 13 alone.
The fastest-growing, codenamed mBridge, connects central bank digital currencies from China, Thailand, the United Arab Emirates, Hong Kong and Saudi Arabia, and is expected to expand to more countries this year.
Russia is unlikely to be one of these countries, but its pilot project for a digital ruble means it is now accepted in the Moscow metro and at some petrol stations. Iran is also working on a digital rial.
“Regardless of what happens in the US election, the Fed is years behind,” Lipsky said.
(1 USD = 7.0930 RMB)