The Official Monetary and Financial Institutions Forum (OMFIF) and Giesecke + Devrient (G+D) released their latest survey on Central Bank Digital Currency (CBDC) to the public on 11 February 2025.
The report revealed that round 30% central banks have confirmed delaying CBDC plans. Despite growing concerns and delays, 67% central banks worldwide remain committed to launching CBDCs.
A marked hesitancy around issuing CBDCs has also been suggested in the outcomes of the report. It notes that despite extensive research and exploratory efforts, only a few central banks have officially issued CBDCs thus far. The two major reasons for delay are legislations and exploration of a wider range of solutions.
Primary concern being privacy, critics warn enabling CBDCs will enable governments to scrutinize transactions closely, without any oversight. Pushback to CBDCs grew post US President Donald Trump banning work on digital dollar. This was also followed by Fed Chair Jerome Powell doubling down on the cancellation.
Alexandra Hachmeister, Director General of the Digital Euro, Deutsche Bundesbank says, “The central bank would not have access to user data. We have no interest in it and would not use it for commercial purposes.”
CBDCs Stalling? Nearly a Third of Central Banks Delay Plans
A new report shows 31% of central banks have pushed back their digital currency (CBDC) timelines, despite most still planning to launch one. The main driver? Currency sovereignty
.
Trump’s CBDC ban last month…
— ThePortablePortfolio (@MoneyNomads1) February 11, 2025
As per the survey, central banks expecting to issue a CBDC have remained relatively steady since 2023 at 74%. The share of central banks in emerging or developed markets expecting to issue a CBDC in the next 3-5 years have increased to 34% up from 26% in 2023.
Explore: BRICS Summit 2025: Russia’s New CBDC Just Broke the US Dollar
CBDC Adoption A Major Hurdle As Banks Make Technical Progress
The survey shows 56% of emerging market central banks are concerned about CBDC adoption challenges. Jamaica, China and Nigeria to name a few have struggled with the adoption rates of their own respective currencies.
“Low adoption as a problem is even more concerning, that is why we’re engaging the market from the beginning to help mature the platform.” said Fabio Araujo, Senior Adviser, Banco Central do Brasil.
Progress has been made in key areas to address CBDCs technical shortcomings. Major wins being interoperability, cybersecurity and offline payments. With these challenges now addressed, the focus is now shifting to user experience. 27% of the survey respondents consider user experience as most challenging are to address.
US think tank – Atlantic Council reported in September 2024 that 134 countries were exploring CBDCs in one form or the other. A tremendous increase from just 35 countries in May 2020. More than 65 nations including India, Australia and Brazil are in advanced stages of developing, testing or deploying CBDCs. Every G20 nation is currently exploring CBDCs with 19 nations already in the advanced stages.
Hachmeister however considers addressing misconceptions about CBDC’s privacy and security an uphill battle. She recognizes the need for central banks to effectively communicate and address CBDC privacy concerns with the public to foster trust in the instrument.
Explore: Microsoft And Chainlink Join Forces As Part Of Brazils Central Bank CBDC Pilot Program
Key Motivations For Development, Issuance Of CBDC
Motivation for issuance is split between developed and emerging markets. 44% of emerging markets chose financial inclusivity as their main motivation while 50% of developed markets chose preserving central bank monetary sovereignty as their primary motivation.
The banks want to create inclusive and reliable finance, expand their reach to the unbanked section of the population and provide financial accessibility to remote areas.
The report indicates that central banks are moving from broad experiments to strategic CBDC decisions. This shift shows the focus is no longer on whether CBDCs will exist, but on when and for what purpose they will be introduced.
CBDCs have the opportunity to gain widespread acceptance by replicating desirable features of physical cash, the survey disclosed. Unlike private liabilities, CBDCs don’t carry counterparty risk and can improve interoperability between different forms of private money.
Offline functionality has become a prominent aspect of CBDCs. It allows individuals in remote or underserved areas to freely use this currency.
G+D Currency Technology chief executive Wolfram Seidman stated, “CBDCs hold significant potential for advancing the digital economy. By offering a public infrastructure, central banks can pave the way for innovative financial products and services, while reducing fragmentation in the financial system.”
Explore: RBI Governor Reaffirms Support For CBDC In India For Cross-Border Payments
The post 30% Central Banks Confirm Delaying CBDC Plans, Survey Reveals appeared first on 99Bitcoins.
