A new report from the Bank for International Settlements (BIS) shows this 2020 is the year the momentum for central bank digital currencies (CBDC) really picked up.
The new BIS working document was published on August 24th and covers the global state of CBDC research and development, technical approaches and political positions. The in-depth study draws on more than 16,000 central bank speeches over the past few years and assesses CBDC designs and the real motivations for different countries to adopt the new model.
“”Attitudes about whether central banks should issue them [CBDC] have changed noticeably in the last year“Write to the authors of the paper. Your research includes a remarkable analysis of public interest in CBDCs over time. BIS data shows that, In 2020, global internet searches for CBDCs significantly outperformed searches for (BTC) and Facebook’s Libra.
The data confirms the report’s claim that Although the concept of CBDC was proposed decades ago, “CBDCs caught the world’s attention” in 2020.
The BIS provides several hypotheses as to why this may be the case. First, he cites the Facebook Libra announcement and subsequent public sector response in 2019 as an unmistakable “turning point”.
Support other data: In late 2019, “central banks representing a fifth of the world’s population reported that they were likely to issue CBDCs very soon.” Also, The proportion of central banks that are expected to issue a CBDC for retail customers in the medium term (1-6 years) doubled in 2019.
A decisive factor accelerating this trendaccording to the BIS analysis It’s the advent of the coronavirus pandemic::
“Social distancing measures, public concerns that cash can carry the COVID-19 virus, and new government-to-person payment plans have further accelerated the move to digital payments.”
The BIS points to the United States, where early versions of the Congressional Fiscal Incentive Bills hinted at the possibility of a digital dollar that accelerates the disbursement of government aid to citizens. In the Netherlands, China, and Sweden, central banks are placing great emphasis on research into CBDs during the pandemic.
The BIS believes that all of these factors may be sufficient to overcome the “high inertia” typical of retail payment behavior. The other side of the coin, however, is the lasting effect:
“When behaviors change, they are often quite persistent. Likewise, changes in payment behavior caused by the COVID-19 crisis, such as increased use of digital payments, can have far-reaching implications. Scope in the future.”
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