90% of Central Banks Are Developing CBDCs — Cryptocurrency Growth as a Key Driver

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The global financial landscape is undergoing a quiet revolution. According to the latest Central Bank Digital Currency (CBDC) survey by the Bank for International Settlements (BIS), 90% of central banks are now actively exploring or developing their own digital currencies, up from 86% the previous year. This marks a significant acceleration in the institutional response to the evolving digital economy — with the rise of cryptocurrencies and stablecoins playing a pivotal role.

Conducted in the fall of 2021 and covering 81 central banks worldwide, the BIS report reveals that digital innovation in finance is no longer speculative — it’s strategic. As decentralized digital assets gain traction, central banks are stepping up efforts to maintain control over monetary sovereignty, payment systems, and financial stability.

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Why Are Central Banks Racing to Develop CBDCs?

While CBDC development is driven by multiple factors, one stands out: the rapid growth of cryptocurrencies and stablecoins. Around 60% of surveyed central banks cited this growth as a key reason for accelerating their CBDC initiatives.

Stablecoins like USDT and USDC, which are pegged to fiat currencies and often used in crypto trading and cross-border remittances, have raised concerns about financial disintermediation. If citizens increasingly use private digital currencies for everyday transactions, traditional banking systems could lose relevance — undermining monetary policy effectiveness and regulatory oversight.

In response, central banks are positioning CBDCs not just as digital cash, but as a tool to preserve public trust, ensure financial inclusion, and modernize national payment infrastructures.

Retail vs. Wholesale CBDCs: Where Is the Focus?

The survey highlights a clear trend: retail CBDCs are taking center stage.

This dual focus reflects a broader ambition: not only to modernize back-end financial systems but also to provide safe, accessible digital money directly to the public.

More than 60% of central banks are already in the proof-of-concept or experimentation phase, while 26% have moved into active development or pilot programs — more than double the 14% reported the previous year. Notably, about 20% are testing retail CBDCs, twice the level of activity seen in wholesale projects.

Real-World Progress: From Pilots to National Launches

CBDC development is no longer theoretical. Several countries have made tangible progress:

These real-world implementations demonstrate that CBDCs are not just policy experiments — they’re becoming operational tools for economic resilience and innovation.

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What’s Driving CBDC Adoption? Key Motivations

The BIS report identifies six primary motivations behind CBDC development:

  1. Financial stability
  2. Monetary policy effectiveness
  3. Financial inclusion
  4. Domestic payment efficiency
  5. Cross-border payment efficiency
  6. Payment system robustness (security and resilience)

Interestingly, these concerns weigh more heavily on emerging market and developing economies (EMDEs) than on advanced economies (AEs). For nations with large unbanked populations or unstable financial infrastructures, CBDCs offer a path to leapfrog traditional banking limitations.

For example, in regions with limited access to physical banks, a mobile-based retail CBDC could allow citizens to store value, send money, and pay for goods using only a smartphone — reducing reliance on cash and informal lending systems.

The Cryptocurrency Catalyst: A Wake-Up Call for Regulators

One of the most significant insights from the report is that the rise of crypto assets has acted as a catalyst for central bank collaboration. Rather than viewing digital currencies as isolated national projects, many central banks are now working together to:

This shift reflects a growing recognition: if central banks don’t lead the digital money revolution, others will.

By launching their own digital currencies, governments can maintain control over monetary policy, ensure transaction transparency, and protect consumers from fraud and volatility — issues that remain prevalent in the unregulated corners of the crypto world.

The Road Ahead: Will CBDCs Go Mainstream?

The data suggests yes. According to the survey, 68% of central banks expect to issue a retail CBDC within the next 1–6 years. While full-scale global adoption may still be years away, the momentum is undeniable.

As technology improves and public trust grows, CBDCs could eventually become as common as banknotes — but with added benefits like programmability, traceability, and integration with smart financial services.

However, challenges remain: privacy concerns, cybersecurity risks, interoperability between systems, and the potential displacement of commercial banks all require careful navigation.

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Frequently Asked Questions (FAQ)

Q: What is a CBDC?
A: A Central Bank Digital Currency (CBDC) is a digital form of a country’s fiat currency, issued and backed by the central bank. It functions like electronic cash and can be used for payments, transfers, and savings.

Q: How is a CBDC different from cryptocurrency?
A: Unlike decentralized cryptocurrencies like Bitcoin or Ethereum, CBDCs are centralized, regulated, and fully backed by national governments. They are not volatile and are designed to complement existing monetary systems.

Q: Can I use a CBDC today?
A: In most countries, no — CBDCs are still in development or pilot stages. However, early adopters like China (e-CNY), Nigeria (eNaira), and The Bahamas (Sand Dollar) already have live programs accessible to select users.

Q: Will CBDCs replace physical cash?
A: Not necessarily. Most central banks view CBDCs as a complement to cash, not a replacement. However, as digital payments grow, physical cash usage may naturally decline over time.

Q: Are CBDCs safe?
A: CBDCs are expected to be highly secure due to government oversight and advanced encryption. However, concerns about data privacy and surveillance remain topics of public debate.

Q: How do stablecoins influence CBDC development?
A: The rapid adoption of stablecoins — especially in cross-border transactions — has prompted central banks to act quickly. Without official digital currencies, governments risk losing control over their financial ecosystems to private entities.

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