According to the Central Bank Digital Currency (CBDC) research report released by the Bank for International Settlements (BIS) on Wednesday, the currency revolution will be digitized… but it may not be fast for most ordinary people.

However, in order to achieve this goal, in the third annual CBDC survey of BIS, 86% of the central banks surveyed said that they are at least considering the pros and cons of issuing digital priority currencies, which is higher than 80% last year. 65 central banks participated in this year’s survey.

What is more telling is the proportion of central banks that have begun to take actual actions. BIS said that 60% of central banks are now conducting CBDC experiments or proofs of concept. Only 42% of central banks are taking action in 2019.

Central banks in emerging markets are more active and purposeful in promoting the development of community development centers than central banks in developed economies, and take financial inclusion and payment efficiency as the primary driving force. They are also more involved: 7 out of 8 CBDC projects are in emerging markets.

“One evidence is the launch of the first’active’ CBDC in the Bahamas,” BIS wrote. “This vanguard is likely to welcome other countries to join. The central bank, which represents one-fifth of the world’s population, is likely to issue a general-purpose CBDC within the next three years.”

Although BIS did not provide details of the issuance plans of each country, this amazing number can only represent China, because China has more than 18% of the world’s population and is also one of the countries with the fastest progress in CBDC projects. China’s DCEP has been in trial operation for a year.

However, BIS said that the global CBDC adoption may take several years. Countries just didn’t use clear plans to launch projects to support them to strengthen CBDC research. It is intriguing that half of the central banks that stated in 2019 that it is “probable” to issue CBDC in the short term have lowered their sentiment to “maybe” or “unlikely” in the 2020 survey.

BIS said that projects with faster progress are also hedging their online windows.

Most central banks are more interested in “retail” CBDC (consumer and daily use) than “bulk” CBDC (systematic payments; inter-bank transfers). Some countries that have considered these two models are now focusing their research on retail, perhaps seeing that the value of digital currency to the public is greater than the value of digital currency to banks.

The legality of CBDC is still an unanswered question among the interviewed central banks. 48% are not sure whether they have the right to issue digital currencies, and 26% are sure they don’t.

In the 2020 survey, central banks still believe that cryptocurrency is a basically insignificant force, even if it is attractive. A strong majority has listed cryptocurrency as a “trivial matter” in the domestic payment field for three consecutive years. It is worth noting that more than 40% of people said that cryptocurrency may have “good” appeal in the field of cross-border payments, which is a rare bright spot in the data that originally minimized encryption.

Central banks of various countries, especially those in emerging markets, said they are more concerned about the threat of stablecoins. BIS said that more than two-thirds of central banks are studying this issue.

However, the interviewees firmly believe that private stablecoin arrangements are not the driving force behind their CBDC projects. The competition from stablecoins and cryptocurrencies failed to provide them with a compelling CBDC reason.

“When it comes to cryptocurrencies, central banks continue to view them as a means of payment that is not widely used,” the report said.

Author/ Translator: Tae Kon Jung