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8 Feb 2022

CBDC Developments Around the World: Is the Era of Digital Currencies Already Upon Us?

Ananda Banerjee

In 2010, you would have laughed off the possibility of a digital rupee, dollar, or any other sovereign currency. Come 2022, and we are already discussing how virtual digital currencies will be the flagbearers of robust economies. And aren’t we already using digital money in the form of online transactions, e-banking, and bank-powered transaction instruments?

Yes, we are, but these aren’t digital currencies in the true sense. Instead, they are like the electronic versions of the bank-channelled cash reserves. What is interesting in 2022 and beyond is an entirely exclusive concept known as Central Bank Digital Currency (CBDC).

Key takeaways

  • Close to 80 countries are looking closely at CBDCs in different capacities.
  • As far as official launches are concerned, nine countries have unveiled official CBDCs.
  • Some cross-border CBDC projects involving South Africa and UAE, albeit separately, are also in the pipeline.
  • Project Dunbar and mCBDC are some prime examples of cross-border virtual currencies.
  • When it comes to developed nations and their CBDC development timelines, the United States is lagging behind the likes of Japan, Euro, and even the UK, by a significant margin.

CBDCs are a lot like fiat money, but they are still quite different from them.


Well, imagine a scenario where you can simply use a virtual tender for ₹10 instead of the note sitting pretty in your pocket. And unlike today, you do not even have to open the intermediary bank’s app to do the same. CBDCs, in the simplest possible sense, are digital and virtual replicas of sovereign legal tenders. Countries adopting the concept of CBDCs on a war footing can promote monetary inclusion and even cater to the unbanked user base comprehensively.

Unlike a modern-day financial setup where you either carry cash or make payments online, a CBDC helps you do one better by ensuring seamless money flow. This virtual currency works without banking dependencies and a claim on the central financial establishment of the country concerned.

But there is a lot more to CBDC than what we have summarized, and if you are interested in learning more about it and its distant cousin, Stablecoin, do check out this highly informative post.

For now, we shall focus on the global adoption of CBDCs by taking a closer look at the countries that have already adopted this intriguing and highly efficient financial instrument. Additionally, we will also go over CBDC projects that are currently in the pilot and developmental stages, including the one proposed by the Indian government.

So buckle up as we virtually tread the globe together, tracing these developments.

CBDC Developments Around the World: Key Findings

As of today, we can segregate CBDC adoption into four categories: launched projects, pilot projects, projects in the development phase, and projects undergoing research.

Coming to the numbers, there are 80 countries currently planning to welcome CBDCs, and they all fall into the aforementioned categories. If we were to draw up the specifics, CBDC is already in motion in 9 countries, and 14 more have kickstarted pilot projects.

Popular CBDCs

Types of CBDCs

Before we take a look at various CBDC developments across the globe, it is crucial to understand the elementary segregation of CBDCs. These insights will help you follow the mindset of the country behind a given digital currency.

1. Wholesale CBDCs

These CBDCs act like standard, nationwide financial reserves, primarily used for initiating inter-bank transactions. You can imagine a wholesale CBDC as the connector between two national banks or one national bank and one central bank, allowing either of them to transfer fundssimilar to an RTGS payment setup.

Wholesale CBDCs are best used for domestic and even cross-border payments; they aren’t meant for B2C (Business to Consumer) transactions.

2. Retail CBDCs

A retail CBDC empowers the regular user. This functionality ensures that the relevant virtual currency can be used for P2P payments and daily transactions. Also, there is no need for an intermediary bank as retail CBDC is directly linked to the central bank, cutting out chances of deposit sinking and illiquidity. 

Retail CBDCs can be made accessible to consumers via an account-based token system or a digital wallet in the case of a blockchain-driven virtual currency.

For now, we will skip the technology behind different types of retail CBDCs. Expect us to cover this in detail in a separate blog soon.

Note: Wholesale and retail CBDCs aren’t mutually exclusive, and one entity might have both characteristics. This unified approach would need several development-intensive steps but will be immensely beneficial to the economy.

Imagine a unified currency for bank-to-bank/cross-border transactions and P2P real-world payments. Food for thought, isn’t it?

Global CBDC Flocking: Categories and Countries 

Launched projects

CBDC, as a fully functional national financial instrument, is now active in the following countries:

  • The Bahamas

The “Sand Dollar” came into being in December 2019. Conceptualized by the Central Bank of Bahamas, this digital currency was piloted in Exuma and was launched nationwide after ten months. Designed as a retail CBDC, the Bahamian Sand Dollar has been instrumental in strengthening financial inclusivity and security whilst keeping illicit activities at bay.

  • Nigeria

Nigeria holds the record for launching Africa’s first CBDC, e-Naira. However, unlike the Bahamas, the Nigerian Central Bank went down hard on crypto activity within the countrybanning it first and then launching its retail CBDC, based on the Distributed Ledger Technology.

Fact Check: DLT or Distributed Ledger Technology prefaces a sequenced but decentralized digital database. As a protocol, DLT uses cryptography to store information accurately and without being manipulated.

The Bahamian and Nigerian CBDCs are gaining popularity over time, but there are seven other Eastern Caribbean nations where CBDCs are already turning heads. These are:

  1. Saint Kitts and Nevis,
  2. Antigua and Barbuda,
  3. Montserrat,
  4. Dominica,
  5. Saint Lucia,
  6. Saint Vincent and the Grenadines, and
  7. Grenada.

Pilot projects

Here are the countries that have officially rolled out their CBDCs and are expected to launch them at full scale in the months to come.

  • China

Well, China has been clearing out competition for its proposed and has proactively envisaged a digital Yuan for quite some time now. After putting bans on cryptos across capacities, China seems to be moving quite rapidly with its CBDC rollout, as the pilot program now prefaces over 28 major Chinese cities. The year 2022 might just be the year of global adoption, with China aiming for widespread deployment of its digital currency, using the Winter Olympics as a starting point.

  • South Africa

Contrary to the popular belief of “One-Nation, One-CBDC,” the intergovernmental Fintech department of South Africa is currently working on three digital currency projects, with a focus on retail and wholesale implementations. Termed Project Khokha, Project Dunbar, and a standard E-tender, the existing pilots will soon lead the charge for nationwide adoption and improved financial innovation.

  • The United Arab Emirates (UAE) and Saudi Arabia

Along with Saudi Arabia, UAE seems to have hopped on to the CBDC bandwagon by working jointly towards a cross-border virtual currency termed Project Aber. Confirmed as a wholesale CBDC for obvious reasons, Project Aber uses DLT (Distributed Ledger Technology) for managing transactions securely.

But that’s not all, as the UAE seems to be working closely with countries like Hong Kong, Thailand, and China on an m-CBDC or (multiple central bank digital currency) Bridge to expand the DLT-based innovation to other countries as well.

  • Sweden

Sweden’s e-Krona has been around for quite some time now, with the pilot starting way back in 2017 in the wake of declining cash usage. Based on the DLT infrastructure, e-Krona aims to go live this year, facilitating small and large commercial retail payments.

And while these are some of the more popular CBDC projects, there are other pilot projects moving along at a brisk pace in nations like Malaysia, Thailand, Singapore, Jamaica, Anguilla, South Korea, Ukraine, Hong Kong, and a few European associations.

Projects in the development phase

Close to 17 countries are working diligently to get their CBDC projects to go live, including Brazil, Canada, Russia, Australia, Cambodia, Japan, and several European nations. However, at this point, India seems to be hogging the limelight as it recently announced its CBDC or Digital Rupee during its Union Budget event, 2022–2023.

Unlike Nigeria and China, crypto was gassed in India but attracted a tax slab of 30%. Also, the Indian CBDC is to follow the DLT-Blockchain synergy, which would then make it useful for wholesale and retail operations. The pilot project can be expected soon as Digital Rupee officially goes live within a year and a half.

Projects in the research phase

The majority of the European Union is still researching the viability of a unified CBDC project. Following in their footsteps are the United States of America, Peru, Kenya, Chile, and over 30 other nations, each looking to edge past the others in a race toward the ‘Future of Money.’


CBDC adoption isn’t just a race to the top. Instead, countries adopting virtual currencies to minimize physical minting and currency printing are steadily expected to join a more sustainable global framework, with their demarcating borders blurred in the digital realm.

And while CBDCs might hit crypto adoption in the short run, they are expected to educate the masses a lot more regarding blockchain supremacy and the perks of a transparent financial ecosystem. With the new standards being adopted, we might see a more interoperable financial foundation in the years to come, led by amplified international coordination.

Did you like what we had to offer on CBDCs? You can always learn and read more about similar concepts and topics with CoinSwitch by your side.

Disclaimer : Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. The information provided in this post is not to be considered as investment/financial advice from CoinSwitch. Any action taken upon the information shall be at user's own risk.


Ananda Banerjee

Content Writer

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