Central Bank Digital Currency : Which Countries Have Adopted CBDC?

Digital currencies like Bitcoin and Ethereum have gained huge popularity amongst people throughout the world due to its decentralized nature.

Digital currencies like cryptocurrency are not regulated by any bank. They work on distributed ledger technology based on blockchain and remain untraceable.

While many tech giants are appreciating this technological advancement, the government is seeing this as a threat to economic stability and looking forward to developing a stable and regulated digital currency.

Many countries are exploring the option of central bank digital currency (CBDC).

What is Central Bank Digital Currency (CBDC)?

Central bank digital currency is a digital form of cash or fiat currency that we use for our day-to-day transactions.

CBDC also uses blockchain technology like crypto but it’s not cryptocurrency. CBDC is regulated by central banks and every transaction is traceable here.

According to Atlantic Council, 87 countries are now exploring CBDC while in May 2020 only 35 countries were taking interest in CBDC.

Out of those 9 countries such as Nigeria, The Bahamas and 7 other countries in Eastern Caribbean have already launched central bank digital currencies (CBDC).

Other countries like India, Russia, Sweden, Brazil, UAE, Ukraine, and Canada are developing and pilot testing their digital currency governed by the central bank.

Countries that have Launched, Developed, & Testing CBDC

Let’s check out the status of CBDCs which have been launched, developed (or developing), and pilot testing by different countries.

Countries which have Launched CBDC

1) The Bahamas

In October 2020, The Bahamas had successfully launched its central bank digital currency – Sand dollar. Sand dollar is the digital form of Bahamian dollar (B$) and regulated by central bank of The Bahamas.

It was the world’s first central bank digital currency (CBDC).

To access Sand dollar, users have to provide KYC information and Download the selected authorized financial institution’s (AFI’s) proprietary eWallet.

2) Nigeria

Nigeria has recently issued eNaira on October 2021. This digital currency is issued and regulated by central bank of Nigeria.

eNaira is used for money transfer and in store contactless payments.

3) Eastern Caribbean Union

7 countries of Eastern Caribbean Union have also developed their own CBDC. These countries are Grenada, Saint Vincent and the Grenadines, Saint Lucia, Dominica, Montserrat, Saint Kitts & Nevis, and Antigua & Barbuda.

Countries where CBDCs are in Pilot Stage

1) Russia

In Feb 2022, Bank of Russian announced that they have completed initial trials and started pilot stage.

The name of Russia’s central bank digital currency is Digital Ruble.

Three banks in Russia are already supporting pilot stage and helping customers to exchange rubles from their account to digital ruble via mobile bank apps and gateways.

Other nine banks are also looking forward to join the pilot stage after upgrading their tech stack as per the announcement published on the website of Bank of Russia.

2) China

Digital Renminbi (also popular as Digital yuan, Digital RMB and e-CNY) is the central bank digital currency issued and regulated by the People’s Bank of China.

Since 2014 China was exploring digital currencies. In April 2021, Digital Yuan went to public testing to improve the currency’s functionality.

China has launched the pilot version of Digital yuan and it can be accessible via e-CNY. e-CNY is the digital yuan wallet app available on Android and Apple app stores.

At the winter Olympics 2022, china had also rolled out the Digital Yuan for foreign attendees.

3) Sweden

Sweden’s central bank, Riksbank decided to explore the digital currency after noticing huge declining use of cash in retail payment.

In Feb 2020, with the partnership with Accenture, Riksbank of Sweden started testing using simulated participants.

ekrona is the central bank digital currency developed by Sweden and currently it’s in pilot testing phase.

4) Jamaica

Digital Jamaican dollar is the central bank digital currency of Jamaica.

On 10^th Feb 2022, Jamaica’s Prime Minister Andrew Holness announced that the Bank of Jamaica will roll out a digital Jamaican dollar in 2022 after a successful pilot testing in 2021.

5) Ukraine

National Bank of Ukraine (NBU) is looking forward to launch their central bank digital currency e-hryvnia.

In Feb 2019, e-hryvnia had successfully completed 2 months of pilot phase. The officials stated that they are still unsure how digital currency would impact.

The project still is in the pilot phase and might be launched by 2024.

6) UAE

Saudi Arabia and UAE are together working on project Aber – wholesale CBDC.

Central banks of Saudi Arabia & UAE have launched this project in collaboration to explore domestic and cross-border settlement using a single regional currency.

The pilot testing of project Aber was different from other CBDC’s. Two central banks and six commercial banks from both the countries were involved. Also the real money was used in the process.

Countries which are developing CBDC

1) India

Indian government had announced India’s central bank digital currency Digital Rupee in Union Budget 2022. Finance Minister Nirmala Sitharaman mentioned that this regulated CBDC will strengthen India’s economy, increase efficiency and lower the expenses of the country’s currency management system.

Digital Rupee is in the development phase and might be launched in the year of 2022-2023 by RBI.

2) Canada

Canada is exploring the potential of digital currency for years and hired project manager to work on the same.

Canada’s digital currency Digital Loonie is in under development but there is no specific timeline has been issued by the Bank of Canada.

Countries Doing Research on CBDC

Other countries like US, UK, Mexico, Iceland, Iran, and Indonesia are doing research on the overall impact of digital currencies. They haven’t revealed their plans or timelines related to CBDC.

To be a part of digital transformation, every country is exploring the pros and cons of regulated digital currency. Central bank digital currency will make currency management cheaper and will also reduce the dependency on cash.

Central Bank Digital Currency FAQ

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