According to the World Economic Forum (WEF), more than 98% of the world’s central banks are “exploring, experimenting, testing or deploying” central bank digital currencies (CBDCs).
The WEF, a Switzerland-based international organization focused on public-private partnerships, predicts in a new report that there could be 24 live CBDCs by 2030.
The organization said wholesale CBDCs (wCBDCs), which are limited to large transactions between financial institutions, could address the banking sector’s challenges related to interbank payments and securities transactions.
“Central Bank Money (CeBM) is critical for interbank payments and securities transactions because it is virtually free of credit and liquidity risk, allows institutions to reach final settlement and promotes financial stability. CeBM is ideal for systemically important transactions, despite the emergence of alternative payment instruments.
Wholesale central bank digital currency (wCBDC) is a form of CeBM that could unlock new economic models and integration points not possible today. wCBDCs promise to maintain CeBM’s role as a credit risk-free payment instrument by providing a foundational layer for digital payments in the next generation of financial markets.”
The WEF says wCBDCs are poised to enhance cross-border transactions. However, the organization acknowledges that the legal and regulatory elements required to enable widespread use of wCBDC are “of unknown timeframe.”
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