The results of the 2022 BIS survey on Central Bank Digital Currencies (CBDCs) were released today. Based on current progress, the BIS says we could see another 15 retail and nine wholesale CBDCs by the end of the decade.

According to the study, the proportion of central banks actively exploring a CBDC grew from 93% in 2021 to 93% in 2022, with further progress in retail experiments. The survey accounts for 94% of global economic output and suggests that emerging markets are leading the race, as advanced economies lag behind in both retail and wholesale CBDC pilots.

The questions explored the current stage of development and motivations for potentially issuing a CBDC and found that almost sixty percent have accelerated their research in response to the rise of crypto assets and stablecoins.

Retail vs. Wholesale CBDC

Overall, the survey suggests that work on retail CBDCs is further along. The number of central banks testing a retail option is double the number running a wholesale test where users are limited to banks. The share of monetary authorities expecting to issue a retail CBDC in the next three years is 18%. Still, sixty-eight percent say it’s unlikely they’ll issue one any time soon.

The study shows that central banks believe that wholesale CBDCs could help alleviate major bottlenecks in cross-border payments, including “the limited operating hours of current payment systems, the length of existing transaction chains, and the processing complex of compliance controls”. The Dunbar Project, which the BIS Innovation Hub implemented together with four central banks in 2022, demonstrated the potential of multi-CBDC platforms to offer cheaper, faster and more secure cross-border payments.

Emerging Markets vs. Advanced Economies

Twenty-eight advanced economies responded to the survey and 58 emerging markets. The study revealed differences between the groups. For one, all current live CBDCs have been issued by developing countries (Bahamas, Eastern Caribbean, Jamaica, and Nigeria). But also, the proportion of emerging market central banks running a retail (29%) and wholesale (16%) CBDC is much higher than that of advanced economies (18% and 10%, respectively).

CBDC coexistence with fast payments

On a final note, an interesting finding is that four out of five central banks agree that CBDCs should co-exist with fast payment systems (FPS). This is because CBDCs offer additional functionality such as schedulable features and offline payments.