Proceeding with caution-a survey on central bank digital currency

A survey of central banks shows that a majority are collaboratively looking at the implications of a central bank digital currency. Although many have reached the stage of considering practical issues, central banks appear to be proceeding cautiously and few report plans to issue a digital currency in the short or medium term.

Introduction

Payments are changing at an accelerating pace. Users expect faster, easier payments anywhere and at any time, mirroring the digitalisation and convenience of other aspects of life (Bech et al (2017)). And, although paper-based payments like cheques and cash still play important roles, new technologies and market entrants are challenging the traditional bank-based payment systems (Jakobsen (2018)).

In addition to changes in how payments are made, even the type of money usedcould be changing. Across the world, central banks are reportedly thinking about how new central bank digital currencies (CBDCs) could replace traditional money (CPMIMC (2018)). There is significant public interest in such a fundamental potential change, and this paper takes stock of central banks’ current work and thinking. It is based on a recent survey of central banks to which 63 responded2 (representing jurisdictions covering close to 80% of the world population). The survey asked central banks about their current work on CBDCs, what motivates that work, and how likely their issuance of a CBDC is.

The survey shows that, although a majority of central banks are researching CBDCs, this work is primarily conceptual and only a few intend to issue a CBDC in the short to medium term.