While China is usually referred to as the most advanced country in the world when it comes to the development of its Central Bank Digital Currency (CBDC), a new report by PricewaterhouseCoopers (PwC) suggests this isn’t the case.
PwC has published the first edition of its “PwC Global CBDC Index 2021”, in which it analyses the development of CBDCs as countries around the world race to develop their own digital currency in terms of retail and Interbank CBDC
Retail CBDCs would be those held directly by citizens and corporations while Interbank CBDCs would be restricted to financial institutions for interbank payment and financial settlement processes, which could operate in a similar way to the current SWIFT system.
The second-largest professional services network in the world and one of the “Big Four” accounting firms, states in the report that it believes that, “CBDCs will contribute significantly to the modernization of the international monetary landscape, hand-in-hand with reconfiguration in both payment and financial infrastructure.”
CBDCs would be a digital version of fiat currencies inspired by the success of cryptocurrency, which they emulate in several aspects but with one major distinction: they are centralized. As such, central banks can regulate different factors like supply and usability, while also tracking all transactions made using it.
According to the report, more than 60 central banks have been exploring CBDCs since 2014, a process that has acceleration over the last years as some iterations have entered implementation phases around the world, most of them (88%) backed by blockchain technology.
Bahamas is Leading on Retail CBDC Development
The first category analyzed in the report shows that emerging economies are particularly strong when it comes to the development of retail CBDCs, with financial inclusion and digitalization being the key drivers behind the efforts.
At this time, only 2 CBDCs have been officially launched and live:…