94% of central banks considering wholesale CBDCs, according to BIS

The Bank for International Settlements (BIS) found that 94% of central banks surveyed are exploring central bank digital currency (CBDC).

But according to the report, central banks are more likely to issue wholesale CBDCs than retail CBDCs over the next six years.

There is a significant difference between a wholesale CBDC and a retail CBDC. A wholesale CBDC is used for transactions that take place between banks and other financial institutions, while retail CBDCs are intended for general public use, such as purchasing a cup of coffee.

This could come as a huge relief to market participants, as vocal opposition sees retail CBDCs as a form of authoritarian outreach.

Eighty-six central banks participated in the BIS survey, conducted between October 2023 and January 2024.

The report further suggests that stablecoins are not used outside of the broader crypto ecosystem.

“Regarding crypto, the survey indicates that to date, stablecoins are rarely used for payments outside of the crypto ecosystem. Additionally, approximately two in three responding jurisdictions have or are working on a framework to regulate stablecoins and other crypto-assets. the authors wrote.

Currently, the total market capitalization of stablecoins across all chains stands at nearly $162 billion, an increase of approximately $32 billion from the start of the year, according to DefiLlama.

Among central banks considering issuing retail CBDCs, more than half are considering safeguards such as holding limits, as well as implementing key features such as interoperability, out-of-pocket options. line and zero remuneration.

CBDCs are a hotly debated topic and have recently become a political issue, likely due to the upcoming US presidential elections.

Earlier this week, former US President Donald Trump called for the remaining supply of Bitcoin to be mined in the United States. Trump claimed that Bitcoin was the last line of defense against CBDCs.

The presumptive Republican nominee has vowed that he will not allow the central bank to use digital coins if he is re-elected president of the United States.

Trump, however, has never clarified his position on how mining more Bitcoin protects American citizens as the central bank issues a currency.

Earlier this year, Rep. Tom Emmer (R-MN) revealed memos indicating that the Federal Reserve had a pro-CBDC agenda. Then, in May, the House of Representatives passed a law that prevents the Federal Reserve from issuing CBDCs without congressional approval.

On May 8, J. Christopher Giancarlo, former chairman of the United States Commodity Futures Trading Commission (CFTC), said that all three assets – crypto, CBDC and stablecoins – are necessary to pave the way for a global future.

“The global future is all of the above: crypto, CBDC, stablecoins and more,” Giancarlo said.

Edited by Stacy Elliott.