NEW YORK: Mainland China is third behind the Bahamas and Cambodia in a ranking of the maturity of central banks’ retail digital currency (CBDC) projects, according to a report from PwC.
More than 60 central banks are now exploring digital currencies, with retail projects more active in emerging economies given the importance of financial inclusion, while interbank or wholesale applications tend to be more predominant in advanced economies, the report said.
The Bahamas and Cambodia take top marks in retail because their projects are already live, while China is still in the test phase. Only 23% of retail projects have reached implementation stage, while nearly 70% of wholesale projects are running pilot programmes, according to the report.
“CBDCs will contribute significantly to the modernisation of the international monetary landscape, hand-in-hand with reconfiguration in both payment and financial infrastructure, ” PwC said.
“They will generate numerous opportunities for further digitisation in both corporates and financial institutions, as their integration in payment and financial infrastructure progresses.”
Central bank efforts at digital currencies accelerated first after bitcoin became more popular and then once the Facebook Inc-backed Libra project, now named Diem, was announced.
With China in the testing phase on its digital yuan, other countries have accelerated their efforts. Jurisdictions like Sweden and the European Union are starting to make some headway.
The Federal Reserve, though, has signalled it’s in little rush to get a digital US dollar off the ground.
China’s efforts to create a digital yuan are aimed at domestic use and its goal for internationalising its currency is not to replace the US dollar, a senior official from its central bank said. — Bloomberg