According to recent data, over 130 countries representing 98% of global GDP are now exploring CBDCs in some form, including pilots, development, or research (albeit few have fully adopted them). This rise reflects both technological momentum and regulatory intent to reclaim control over digital currency ecosystems, especially as private stablecoins and decentralised crypto assets have proliferated.
Source: https://cbdctracker.org/
The main differences between CBDCs and cryptocurrencies
Stability and trust
While cryptocurrencies like Bitcoin or Ethereum operate in highly volatile and speculative environments, CBDCs are anchored to fiat currencies and issued by central banks. This offers higher value stability and institutional backing, reducing the risk profile for users.Design and oversight
CBDCs are programmable but centrally managed. Governments can impose compliance measures and offer consumer protection in ways decentralised crypto systems cannot. Moreover, unlike crypto assets, CBDCs are not mined or privately issued, ensuring state control over monetary supply and transaction oversight.Kar Yong Ang, financial market analyst at Octa, notes: ‘CBDCs offer a new model of digital liquidity—blending state trust and legal tender with tech efficiency. For traders, this opens doors to a more secure and transparent digital finance ecosystem.’
The global race to develop CBDCs and the drivers behind it
Here are three key reasons why central banks invest resources in CBDSs:-
The
decline
of
cash
and
rise
of
digital
payments.
As
societies
increasingly
favour
digital
over
physical
money,
central
banks
face
pressure
to
modernise
public
currency
formats.
In
Sweden,
for
example,
cash
transactions
make
up
less
than
10%
of
payments.
CBDCs
are
seen
as
a
public
alternative
to
private
payment
apps
and
platforms,
ensuring
monetary
sovereignty
in
the
digital
realm.
- Controlling private stablecoin risks. Private stablecoins like USDT and USDC have raised concerns over systemic risk and shadow banking practices. A CBDC can serve as a stable counterbalance to these instruments, offering liquidity and legal clarity in fast-evolving financial markets.
- Financial inclusion and transparency. CBDCs can increase financial inclusion by offering digital wallets to unbanked populations, especially in developing economies. They also offer governments more visibility into money flows, enhancing tax collection and curbing illicit finance—though this has sparked debate around surveillance and privacy.
Pros and cons of CBDCs
CBDCs offer notable advantages: their value is typically pegged to fiat currencies, ensuring greater price stability than most cryptocurrencies. With full state backing, they function as legal tender and may include programmable features like conditional payments. For underbanked populations, they also present a path toward improved financial access.However, concerns remain. Privacy is a major issue, as CBDCs could give governments visibility into personal transactions. They also pose cybersecurity risks, potentially becoming targets for large-scale attacks. Moreover, they could interfere with traditional monetary policy and financial market dynamics if not carefully designed. For instance, commercial banks could experience deposit runs if individuals perceive CBDCs as a safer alternative to traditional money for savings.
Real-world cases
Although the majority of countries still research CBDC and their application in the economy, some have already implemented them.-
Bahamas.
The
Sand
Dollar
became
the
first
nationwide
CBDC
in
2020.
It
now
serves
all
islands
through
a
network
of
mobile-based
wallets.
-
Nigeria.
The
eNaira,
launched
in
2021,
has
seen
a
slow
adoption
of
less
than
0.5%
as
of
2025.
The
government
continues
to
offer
incentives
to
boost
usage.
-
China.
The
e-CNY
has
been
piloted
in
over
25
cities
and
integrated
into
public
transit
and
e-commerce
platforms.
Its
scale
makes
it
the
most
advanced
major-economy
CBDC.
Looking ahead: the road to adoption
While CBDCs promise greater efficiency and offer more tools for governments to implement social objectives, they also pose new governance challenges. To thrive, states will have to balance innovation with civil liberties, infrastructure resilience, and global interoperability. As the world of digital currencies continues to develop, CBDCs are increasingly important for progressive traders to grasp. Keeping up with developments can give a vital advantage in understanding the future of money.___
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