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2/13: First off, CBDCs are central bank-issued and backed digital currencies.
They digitally represent a country's fiat currency and can be divided into 2 types: retail CBDCs (for the general public) and wholesale CBDCs (for financial institutions & interbank settlements).
They digitally represent a country's fiat currency and can be divided into 2 types: retail CBDCs (for the general public) and wholesale CBDCs (for financial institutions & interbank settlements).
3/13: CBDCs vs. the Current System.
CBDCs differ from the current financial system. They're digital currencies, unlike the current system, which is based on physical cash and electronic bank deposits. And then there's the whole thing with retail and wholesale CBDCs...
CBDCs differ from the current financial system. They're digital currencies, unlike the current system, which is based on physical cash and electronic bank deposits. And then there's the whole thing with retail and wholesale CBDCs...
4/13: Global Adoption: CBDC adoption varies greatly across countries.
Let's dive deeper into the data on global adoption and the various stages of CBDC development...
Let's dive deeper into the data on global adoption and the various stages of CBDC development...
5/13: Pilot Testing.
1. By 2021, 18 G20 countries had advanced CBDC development, with 7 in pilot testing.
2. China's DCEP has 260 million users and will expand nationwide by 2023.
3. Australia, Thailand, Brazil, India, South Korea, and Russia will also pilot test in 2023.
1. By 2021, 18 G20 countries had advanced CBDC development, with 7 in pilot testing.
2. China's DCEP has 260 million users and will expand nationwide by 2023.
3. Australia, Thailand, Brazil, India, South Korea, and Russia will also pilot test in 2023.
6/13: Early Research & Exploration.
By December 2022, all G7 economies had advanced to the CBDC development stage. And the New York Fed's Project Cedar shifted US from research to development.
In total, 114 countries—representing 95% of global GDP—are considering a CBDC.
By December 2022, all G7 economies had advanced to the CBDC development stage. And the New York Fed's Project Cedar shifted US from research to development.
In total, 114 countries—representing 95% of global GDP—are considering a CBDC.
7/13: Fully launched CBDCs.
11 countries have fully launched digital currencies, with Jamaica being the most recent to do so with its CBDC, the JAM-DEX. These countries are part of a growing group of nations that have progressed from pilot testing to actual implementation.
11 countries have fully launched digital currencies, with Jamaica being the most recent to do so with its CBDC, the JAM-DEX. These countries are part of a growing group of nations that have progressed from pilot testing to actual implementation.
8/13: Cross-border CBDC Projects.
Financial sanctions against Russia have prompted countries to consider alternative payment systems, and the number of cross-border wholesale CBDC tests and cross-border retail projects has nearly DOUBLED since 2021.
Financial sanctions against Russia have prompted countries to consider alternative payment systems, and the number of cross-border wholesale CBDC tests and cross-border retail projects has nearly DOUBLED since 2021.
9/13: The Good.
1. CBDCs enable faster and lower-cost transactions.
2. CBDCs offer digital services to the unbanked and underbanked.
3. CBDCs give central banks new and more precise policy tools.
4. Reduced cash management costs.
1. CBDCs enable faster and lower-cost transactions.
2. CBDCs offer digital services to the unbanked and underbanked.
3. CBDCs give central banks new and more precise policy tools.
4. Reduced cash management costs.
10/13: The Bad.
1. CBDCs risk bank runs in times of stress, threatening banking stability.
2. CBDC adoption may reduce commercial banks' profitability, limiting credit and economic growth.
3. CBDCs require cybersecurity, scalability, and interoperability, aka. costs.
1. CBDCs risk bank runs in times of stress, threatening banking stability.
2. CBDC adoption may reduce commercial banks' profitability, limiting credit and economic growth.
3. CBDCs require cybersecurity, scalability, and interoperability, aka. costs.
11/13: The Ugly.
1. CBDCs erode privacy, as governments and central banks track transactions and eliminate cash anonymity.
2. CBDCs risk financial surveillance, power abuse, and increased censorship.
3. Authoritarian regimes may use CBDCs to repress dissent and limit freedoms.
1. CBDCs erode privacy, as governments and central banks track transactions and eliminate cash anonymity.
2. CBDCs risk financial surveillance, power abuse, and increased censorship.
3. Authoritarian regimes may use CBDCs to repress dissent and limit freedoms.
12/13: "What about FedNow?"
FedNow, contrary to popular belief, is not a CBDC. It is a payment infrastructure that processes transactions faster, operates 24/7, and transfers funds without delay, even on weekends and holidays.
But is it a step closer to a CBDC? Likely.
FedNow, contrary to popular belief, is not a CBDC. It is a payment infrastructure that processes transactions faster, operates 24/7, and transfers funds without delay, even on weekends and holidays.
But is it a step closer to a CBDC? Likely.
12.5/13: Sorry to interrupt, but...
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It's totally FREE 👇
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13/13: Conclusion?
CBDCs may have some benefits, but their drawbacks are considerable.
Despite these concerns, the adoption trend of CBDCs doesn't seem to be stopping anytime soon...
CBDCs may have some benefits, but their drawbacks are considerable.
Despite these concerns, the adoption trend of CBDCs doesn't seem to be stopping anytime soon...
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