• In recent months, four countries that had previously initiated major CBDC pilot programs have scrapped their adoption plans altogether.
• Tony Yates, former senior adviser to the Bank of England, recently exclaimed that the “huge undertaking” associated with digital currencies is not worth the costs and risks.
• Despite the apparent enthusiasm, a growing chorus of voices in mainstream finance and among the world’s central banks have begun doubting the long-term efficacy and viability of CBDCs.
As the crypto winter persists, the world’s central banks are beginning to rethink the feasibility of in-house digital currencies. To date, nine countries have rolled out an active CBDC offering, with China’s digital yuan being used during the 2022 Winter Olympics. Other countries that have initiated similar projects include the Bahamas, the Marshall Islands and Nigeria, but the latter’s eNaira has seen poor uptake. India and Mexico have also launched pilot schemes for their digital rupee and peso respectively, with the latter’s launch expected in the coming year.
However, many in mainstream finance and among the world’s central banks have begun expressing doubts about the long-term efficacy and viability of CBDCs. Tony Yates, former senior adviser to the Bank of England, recently commented that the “huge undertaking” associated with such digital currencies is not worth the costs and risks. He further noted that the recent rollouts of CBDCs have been questionable, since there are already digital versions of existing cash streams, coins and notes.
The skepticism surrounding CBDCs has grown so much, that four of the countries that had previously initiated major CBDC pilot programs have scrapped their adoption plans altogether. This shows just how difficult the transition to digital currencies can be, and how much more research and evaluation is needed before they are ready for mass use.
The global financial landscape is changing at a rapid pace, and it is clear that governments and central banks are increasingly interested in the potential of digital currencies. However, it is important that the implementation of these currencies is done carefully, as the risks and costs associated with them must be weighed against the potential rewards. It is only then that the world can truly benefit from the advantages that digital currencies can bring.