Over the past few months, global powers have been stepping up efforts to develop central bank digital currencies (CBDC) amid a decline in the use of cash and concerns that cryptocurrencies are eroding state control over money.

According to a survey by the Bank for International Settlements (BIS), 80% of central banks are exploring CBDCs at some level.

While analysts have been mostly glued to the progress of China’s coming digital yuan – widely viewed as the frontrunner in this particular race – activity has been heating up in other Asian jurisdictions and across Europe. Most recently, the big CBDC headlines arose out of France and South Korea, with both countries announcing the launch of pilot programs for testing a digital euro and a digital won respectively.

According to the BIS, a shift in payment behaviour brought on by the coronavirus pandemic is further spurring the adoption of digital payments and sharpening the debate over CBDCs. Lockdowns and social distancing have hit the global economy hard and as such, governments around the world who have previously dragged their heels on CBDCs, are now looking more closely at how digital currencies can deliver solutions into getting money to people faster during this ongoing crisis.

In this blog, we look at seven major central banks tinkering with digital currencies.

People’s Bank of China

Despite the nation recovering slowly from the deadly virus, the Chinese government’s commitment to launch a CBDC has not waned. According to a report by Global Times, the People’s Bank of China (PBC) has accelerated its tokenised currency initiative and will be launching it even sooner than expected.

Unlike many other countries, China appears well prepared for a CBDC as it boasts the world's largest cashless market. The majority of transactions are conducted using mobile payment apps, such as Alipay or WeChat, and it has been reported that $37 trillion was processed via such apps in 2018.

For its digital currency, the PBC has collaborated with local juggernauts like Huawei, Tencent and Alipay (the financial wing of Alibaba) and reports emerged that more than 80 patents relating to the proposed CBDC have been filed.

China’s progress towards digitalising its domestic currency has caused a stir in other major economies, given the potential implications that growing Chinese influence could bring to global markets. Facebook CEO Mark Zuckerberg alluded to this threat in his Congressional hearing about the Libra token, warning that: “If America doesn’t innovate, our financial leadership is not guaranteed.”

The Federal Reserve of United States

One of the unintended consequences of Facebook’s bid to launch Libra is the response it prompted from major central banks into evaluating the merits of a digital currency and reviewing the stance on regulation.

Though Libra sprung central banks all over the world into action, in the United States, the Federal Reserve continues to play its cards close to its chest.

Initially, the Fed largely distanced itself from the concept of a CBDC. Treasury Secretary, Steven Munchin, stated in December that he and Fed Chairman, Jerome Powell, saw ‘no need’ to issue a digital currency in the near future. However, Fed governor, Lael Brainard, revealed in February that research was underway into CBDC issuance to counter initiatives like Facebook's Libra.

Zuckerberg’s attempts to establish a Libra narrative that is palatable to officials – such as arguing that Libra would ‘extend America's financial leadership’ in the world – are so far proving futile. Instead, Brainard has stated that Facebook’s foray into the digital currency market would weaken the Fed’s ability to regulate payments.

The recent draft of the US coronavirus relief plan that the House of Democrats proposed (the CARES Act), initially authorised the creation of a digital dollar. Due to the complicated nature of the system, it didn’t make the final cut, but the concept marks an important milestone on the path toward what may be an inevitable future of a digital dollar.

Bank of England

As coronavirus shuttered nearly every aspect of society last month, the Bank of England published a discussion paper seeking comments from the public on whether it should establish a CBDC. The release of this paper came at a time when the pandemic was exposing a gaping hole in the tech infrastructure of legacy institutions.

The delivery of emergency funds to the public and businesses has proven cumbersome and inefficient. Chancellor Rishi Sunak was assailed for initially excluding Britain’s five million-strong freelance community from financial aid due to lacklustre digital capabilities. Crypto A.M’s James Bowater, recently raised the point that had a CBDC structure been in place, the distribution of urgent financial relief would have been achieved at the tap of a button, without the involvement of high-street banks.

In addition to publishing the Discussion Paper, the BoE also hosted a webinar on 7 April. During the session, BoE’s analysts pointed to the likelihood of courting assistance from private companies in the issuance of a tech-enabled alternative to the British Pound.


Through the years, Sweden has established itself as a country of pioneers and innovators. It’s no surprise then that the central financial institution, Riksbank, is at the forefront of investigating the potential for a CBDC.

Riksbank pointed to Sweden’s dramatic decline in the use of cash as the reason for exploring a CBDC. It was reported in Wired this week that just 1% of Sweden’s GDP circulates as cash. Instead, mobile payment solution, Swish, is the payment method of choice for individuals and small businesses alike. Launched in 2012 by six of Sweden’s large banks, the app revolutionised people’s relationship with cash in the Scandinavian country.

The central bank began trialling its blockchain-based digital currency, the e-krona, in February and its expected to last until at least 2021. The initiative is looking to determine whether the digital currency can bolster the country’s payments landscape.

Bank of Japan

As the birthplace of cryptocurrency, Japan has often been ahead of the pack in the acceptance, regulation, and legalisation of digital assets. Certainly, no other country in Asia has been as consistent in the approach of the use and trade of digital currencies. As such, the next logical step for Japan would be to create a CBDC.

Although Tokyo hasn’t been overly vocal about plans to unveil a CBDC, it is widely believed that, behind the scenes, the country is on the fast track to developing a digital yen. With deep roots in tech and expertise in crypto, Japan would be more than adept at deploying a CBDC.

Reserve Bank of India

Prime Minister Narendra Modi’s government has so far held a staunchly negative position on the wider cryptocurrency market.

For two years, The Reserve Bank of India (RBI) prevented banks from offering banking services to individuals and businesses that dealt in cryptocurrencies. This was until last month, when the Supreme Court of India overturned the crypto blanket ban in a landmark ruling.

The RBI has been a vocal opponent for private digital currencies with Shaktikanta Das, the bank’s governor, previously saying that cryptocurrency issuance should be a sovereign mandate only. In December, the central bank confirmed that it was mulling the possibility of developing and potentially launching a sovereign digital currency. However, there have been no further updates since.

Confidence in the Indian financial system has recently hit a new low following the collapse and fumbled rescue of corporate lender, Yes Bank. Many commentators are saying that the emergence of a digital rupee would be a huge boost and the best chance that the RBI has for a fresh start.

Central Bank of Russia

Russia’s relationship with digital currencies is not a straightforward story. Over the last few years, there’s been much confusion surrounding the legal framework of crypto. The latest twist in the tale is the outright prohibition on issuing and selling cryptocurrencies. However, this bill is now postponed due to coronavirus.

While the Bank of Russia (BoR) may not be happy for its citizens to engage in crypto transactions, it’s been reported that the country has advanced notably with its development of a cryptocurrency rouble.

Details are scant, but Anatoly Aksakov, head of the Duma committee on the financial markets, confirmed in December that a digital rouble is on the cards, without indicating a timeframe. He also specified that although the digital rouble shall be blockchain-based, it’ll be fully controlled and administered by the BoR.


The surging popularity of blockchain technology is opening up a whole new paradigm of possibility in the payments area, with CBCDs poised to lead the next evolution of money.

As the first native digital currencies roll out, their adoption rates and effects on the economy will be closely scrutinised. If CBDCs can deliver the speed and lower transaction costs consumers want while successfully tracking money laundering, terrorist financing, tax avoidance and other criminal transactions, the outcome may be a significant jump in economic growth.

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