Nigeria, Bahamas lead CBDC race; over 80% central banks mulling over CBDC: PwC report

As per the findings of the 2022 PwC CBDC Global Index report, more than 80 per cent of central banks across the world are considering launching a central bank digital currency (CBDC) or have already done so.

The PwC CBDC Global Index analyses and ranks the leading retail and wholesale CBDC projects. The index evaluates the current stage of CBDC project development also taking into account central bank opinion and public interest.

“Given the fall in cash use and the rise in cryptocurrencies, our new report gives a timely update on the progress and development of CBDCs,” said Haydn Jones, PwC.

According to the report, retail CBDC projects, which are digital currencies designed for public use, have reached greater maturity levels than wholesale projects which are digital currencies used by financial institutions that have accounts with central banks. But the past year has seen progress on a number of successful wholesale pilots.

The Index's retail CBDC list is led by the Central Bank of Nigeria’s eNaira which is Africa's first CBDC, and the Sand Dollar, which was issued as legal tender by the Central Bank of the Bahamas in October 2020. The report also focuses on China, which became the first major economy to pilot a CBDC with the introduction of the digital yuan in 2020, and as of March 2022, 12 cities, including Beijing and Shanghai are running pilot projects.

India’s effort to launch its own retail CBDC, the 'Digital Rupee' by the Reserve Bank of India is also mentioned in the report.

As per the index, flagship CBDC project on the wholesale side is a collaboration between the Hong Kong Monetary Authority (HKMA) and the Bank of Thailand (BoT) to launch the mBridge project, which is focused on developing a proof-of-concept prototype for real-time, cross-border foreign exchange payments using distributed ledger technology. The work of Singapore's Monetary Authority (MAS) is also highly regarded as per the list.

“CBDCs will facilitate more effective, lower cost and 24/7/365 cross-border payments for the financial services industry,” said Gary Ng, Partner Risk Assurance, PwC Hong Kong. 

The PwC research also discusses stablecoins, which are digital currencies that are collateralized by a fiat currency and can be used to build a bridge between the existing financial environment and digital technology.

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