Central banks are researching digital currencies, but very few plan to issue them soon, according to a Bank for International Settlements (BIS) survey. The central banks’ message out of the survey is that they are “proceeding with caution” in this matter.
The hypothetical benefits and risks of central bank digital currencies are being widely discussed. This BIS paper adds to these discussions by taking stock of how progress and plans in this area are developing, based on a global survey of central banks.
Responses show that central banks are proceeding with caution and most are only at a conceptual stage with their work. However, a handful have moved to considering practical issues and a couple of central banks with idiosyncratic circumstances might issue a digital currency in the short or medium term.
As the debate rages on, the BIS survey of 63 central banks shows that 70% are currently, or soon will be, engaged in CBDC work. Of these, over half are looking at both general purpose and wholesale CBDCs, with a third just focusing on general purpose and 13% just wholesale.
But, only five central banks are at the pilot stage and even fewer see issuance as likely in the next six years.
This is largely because, while most central banks have done enough work to clarify the challenges of launching a CBDC, they are not yet convinced that the benefits outweigh the costs.
This is not the case everywhere; Sweden is pushing ahead with plans to build a technical framework for the issuance of a new electronic currency, the e-krona.
Read the full report: BIS papers – Proceeding with caution, a survey on central bank digital currency