A recent survey has revealed that nearly one-third of central banks have postponed their plans to launch central bank digital currencies (CBDCs). The delay stems from concerns over regulatory frameworks and shifting economic priorities.
Nearly one-third of surveyed central banks have postponed their CBDC rollout, citing regulatory and economic concerns. Source: OMFIFThe Official Monetary and Financial Institutions Forum (OMFIF) and security technology firm Giesecke+Devrient Currency Technology surveyed 34 central banks. The findings show a decline in launching CBDCs, with only 18% of central banks now inclined to issue one, compared to 38% in 2022. At the same time, the number of central banks that are against issuing a CBDC has increased by 15% since 2022.
The majority of central banks surveyed by OMFIF anticipate launching a CBDC within the next decade. Source: OMFIFRegulatory and Economic Concerns Behind the Delay
One of the primary reasons central banks are delaying their CBDC plans is uncertainty around regulatory and governance frameworks. The report suggests that many central banks are hesitant to move forward without clear legislation in place. In some cases, the decision to launch a digital currency depends on political approval rather than the technical capability of the central bank.
Economic challenges have also played a role in postponing CBDC development. Some central banks have chosen to prioritize more immediate financial issues, such as inflation and rising national debt, over digital currency projects. One surveyed central bank specifically cited an inflation spike and debt distress as the reason for postponing its CBDC launch.
Trump’s CBDC Ban Raises Industry Concerns
The regulatory debate over CBDCs intensified after U.S. President Donald Trump signed an executive order on Jan. 23. The order banned the creation, issuance, and use of a CBDC in the United States. While the move was largely welcomed by the crypto community, some industry executives worry that it could influence other nations considering CBDC development.
Privacy Concerns Persist
While technical limitations were once a major obstacle for CBDCs, the survey found that they are no longer a serious concern for most central banks. Previous studies cited challenges such as offline payments, privacy issues, and interoperability with existing financial systems. However, these problems appear to have been largely addressed.
Despite this progress, some central banks remain cautious due to privacy concerns. One institution cited user privacy risks as a key reason for delaying its CBDC rollout. The report notes that privacy has become an increasingly contentious issue due to the vast amounts of personal data collected, stored, and analyzed in digital transactions.
Despite the growing reluctance among some central banks, the majority of those surveyed still expect to introduce a CBDC in the future. The Human Rights Foundation, which launched a CBDC tracker in 2023, has discussed the potential benefits of digital currencies. These include improved payment efficiency and greater financial inclusion for unbanked populations.
However, critics argue that CBDCs could also pose risks. This would be the case particularly concerning government control and surveillance. Some experts warn that a state-issued digital currency could lead to greater financial monitoring and reduced personal privacy. This would make it a highly controversial topic in global financial policy discussions.
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