According to a new study by the Bank for International Settlements (BIS), central banks are actively exploring state-owned cryptocurrencies, and their mass release is initiated by developing countries.
According to the results of the third annual BIS survey, which was attended by 65 central banks, 86% of respondents said that they at least consider the pros and cons of issuing their own digital currencies. Last year, this figure was 80%.
According to the survey, 60% of central banks are currently experimenting with state-owned cryptocurrencies. In 2019, only 42% conducted such tests. Central banks in developing countries are promoting the concept of a state-owned cryptocurrency with more enthusiasm and commitment than in advanced economies. Seven of the eight state-owned cryptocurrency projects are in emerging markets.
“The launch of the first real state-owned cryptocurrency in the Bahamas was a testament to this research. This trailblazer is likely to be joined by others. Central banks, collectively representing a fifth of the world’s population, are likely to issue general-purpose government cryptocurrencies in the next three years, ” the report said.
According to BIS, it will take several more years for the global adoption of state-owned cryptocurrencies. Many countries are not yet supported his in-depth study of the concept of the final plans for the deployment of the project. Tellingly, half of the central banks that in 2019 said they were “likely” to issue a state-owned cryptocurrency in the short term, this year spoke of a “possibility” or “unlikely” release in the near future.
Most central banks are more interested in” retail “government cryptocurrency (consumer and everyday use) than in” wholesale ” (system payments, transfers between banks). Some countries that once considered both models are now focusing their research on the retail concept.
The legality of state-owned cryptocurrencies remains an unanswered question among most central banks surveyed. 48% of respondents are not sure that they have the right to issue a digital currency, and 26% are sure that there is no such right. Recall that the International Monetary Fund recently stated that only 23% of the Central Bank can legally issue state-owned cryptocurrencies.”
It is noteworthy that more than 40% of respondents said that private cryptocurrencies can have a “good” appeal in the field of cross-border payments. Central banks, especially in emerging markets, have expressed great concern about the threat posed by stablecoins. According to the BIS, more than two-thirds of central banks are looking into this issue.
“When it comes to cryptocurrencies, central banks are still not considering their widespread use as a payment tool,” the report says.