World leaves behind the U.S. on central bank digital currencies
The world is moving ahead with central bank digital currencies (CBDCs). The U.S., it increasingly appears, isn’t.
Driving the news: Since the summer, a host of countries leaped forward in their development of CBDCs. The largest economy in Africa — Nigeria — launched one that’s now in use. And new collaborations between nations took shape.
- This interactive map by the Atlantic Council’s GeoEconomics Center, newly updated yesterday, shows where each country in the world stands in its development of a CBDC.
Why it matters: While the U.S. is still in the research phase, 39 countries have advanced to development, pilot programs, or actual launches.
- The Federal Reserve and Treasury Department could be weighing in on global standards and technologies. “In the absence of that, countries are figuring it out for themselves, and we may or may not like what they end up figuring out," Josh Lipsky, director at the Atlantic Council’s GeoEconomics Center, tells Axios.
Catch up quick: CBDCs are digital versions of existing currencies — legal tender issued, governed and backed by a central bank.
- The Fed was planning to release two papers on CBDCs by the late summer, laying out its views on whether and how the U.S. should proceed. Those papers haven’t been published yet.
By the numbers: Since the late summer, nine new countries have formally begun research on developing a digital currency — and four more have launched actual currencies into their markets, the Atlantic Center data shows.
Go deeper: Partnerships — like Project Dunbar, a CBDC collaboration between Australia, South Africa, Singapore and Malaysia — are cropping up as countries seek to learn and scale up more quickly, Lipsky says.
- And South Korea started a pilot digital currency in August, the first of its economic size to do so based on distributed ledger — or decentralized — technology.
What we're watching: Those Fed papers should be out any day now.