A recent report from Juniper Research projects that central bank-issued digital currencies, known as CBDCs, are on track for significant expansion by 2031.
The study estimates a 2,430% growth in transactions of these currencies, which could increase from the 307.1 million projected in 2024 to 7.8 billion by the end of the decade.
CBDCs are on track to achieve greater global adoption
This expansion reflects the interest of central banks in maintaining direct control over the monetary system in the face of competition from stablecoins and traditional card networks.
Progress of CBDCs globally today. Source: CBDC Tracker.
Currently, 134 countries, representing 98% of the global economy, have initiated CBDC research or testing programs, a significant jump from 35 countries in May 2020, showing rapid adoption.
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Furthermore, the economic benefits of CBDCs include a potential savings of $45 billion in cross-border transactions by 2031. According to Juniper Research, the reduction of intermediaries and the optimization of processing would impact domestic payments and global trade.
BIS Standards May Hinder CBDC Adoption in International Trade, Study Says
First, the report includes a country-by-country readiness index, assessing the progress and willingness of different regions to adopt CBDCs and stablecoins. However, this index covers eight key regions and provides specific projections for the growth of market segments in each.
Furthermore, the study also highlights the role of international organizations, such as the BIS, in defining standards to ensure the interoperability of CBDCs. Without such standards, Juniper Research warns, the usefulness of CBDCs in international trade could be limited, impacting their adoption in financial markets.
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China and the European Union are leading the way in testing the digital yuan and euro, reflecting the G20’s interest in CBDCs, with 44 pilots underway. These mass trials suggest that digital currencies could soon become a part of international trade and redefine payments.
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