CBDC Global Progress Comparison 2024: Central Bank Digital Currency Race

What is CBDC: Fundamentals

CBDC (Central Bank Digital Currency) is a digital form of legal tender issued by central banks. Unlike private cryptocurrencies like Bitcoin, CBDCs are official digital versions of national currencies backed by sovereign credit.

Types of CBDCs

Type	Target Users	Use Cases	Examples
Retail CBDC	General Public, Businesses	Daily Payments, P2P Transfers	Digital Yuan, Sand Dollar
Wholesale CBDC	Financial Institutions	Interbank Settlement, Securities Settlement	Many Developed Country Pilots
Hybrid	Both	Multi-purpose	Some Design Proposals

CBDC vs. Existing Payment Methods

Feature	Cash	Bank Deposits	CBDC	Crypto
Issuer	Central Bank	Commercial Banks	Central Bank	Private (Decentralized)
Form	Physical	Digital	Digital	Digital
Legal Tender	Yes	Indirect	Yes	No (Usually)
Privacy	High	Medium	Design-Dependent	Varies
Offline Use	Possible	Not Possible	Design-Dependent	Not Possible
International Transfer	Difficult	High Cost	Efficiency Gains Expected	Possible

Why CBDCs Are Getting Attention

Cashless Trends: Declining cash use, digital payment proliferation
Competition with Private Crypto: Rise of Bitcoin, stablecoins
Financial Inclusion: Services for the unbanked population
International Payment Efficiency: Breaking SWIFT dependence
Monetary Policy Efficiency: Direct fund provision, negative rate implementation
Geopolitical Factors: Challenging dollar hegemony, sanctions avoidance

CBDC is also called "digital cash," but its design and operation can give it entirely different properties. Some designs protect privacy while others allow government monitoring of all transactions. This design choice determines CBDC's social impact.

Global CBDC Development Landscape 2024

As of 2024, over 90% of the world's central banks are researching or developing CBDCs.

Distribution by Development Stage

Stage	Definition	Country Count	Key Countries
Full Launch	General Public Use	~10	Bahamas, Nigeria, Jamaica
Pilot	Limited Experiments	~20	China, India, Brazil
Development	Technical Development Stage	~30	Eurozone, South Korea, Australia
Research	Feasibility Study	~60	Japan, USA, UK
Inactive	Discontinued/Not Started	~10	Denmark, Ecuador

Regional Characteristics

Asia Pacific

China: Most advanced large-scale pilot, Digital Yuan
India: e-Rupee pilot expanding
Japan: Digital Yen experiments, decision around 2026
South Korea: Digital Won under serious consideration
Australia: eAUD pilot completed

Europe

Eurozone: Digital Euro preparation phase, possible launch ~2028
UK: "Digital Pound" under consideration, launch undecided
Sweden: e-krona pilot, cashless pioneer
Switzerland: Focus on wholesale CBDC

Americas

USA: Research stage, politically divided debate
Brazil: Drex pilot, ramping up in 2024
Caribbean Nations: Bahamas, Jamaica already operational

Africa and Middle East

Nigeria: eNaira operational (low adoption rates)
South Africa: Wholesale CBDC experiments
UAE: Participating in mBridge project

Leading CBDC Projects

Let's look in detail at the major projects leading global CBDC development.

Digital Yuan (e-CNY): China

The world's largest CBDC pilot project:

Item	Details
Launch	2020 (Pilot)
Coverage	20+ cities/provinces (expanding)
Transaction Volume	~7 trillion yuan (~$1 trillion) cumulative
Wallets	~260 million
Features	Two-tier structure, offline payments, programmable

Digital Yuan Design Features

Two-tier Structure: Central Bank to Commercial Banks to End Users
Managed Anonymity: Small amounts anonymous, larger require ID
Offline Function: NFC technology enables internet-free payments
Programmability: Expiration dates, usage restrictions possible
Internationalization: Cross-border payment experiments via mBridge

Challenges and Criticism

Daily usage adoption still low (WeChat Pay, Alipay dominant)
Privacy concerns (enhanced government surveillance)
International wariness (sanctions evasion concerns)

Digital Euro: European Central Bank (ECB)

Large-scale project targeting 340 million eurozone residents:

Item	Details
Current Stage	Preparation Phase (Nov 2023~)
Expected Launch	~2028 (decision 2025+)
Design Policy	Privacy-focused, cash complement
Holding Limit	~3,000 EUR (under consideration)
Features	Offline function, bank-intermediated model

Design Features

Privacy Focus: Offline transactions have cash-like anonymity
Holding Limits: Limiting impact on banking system
Non-Programmable: No plans to introduce usage restrictions
Legal Tender Status: Considering mandatory acceptance in member states

e-Rupee: Reserve Bank of India (RBI)

Item	Retail CBDC	Wholesale CBDC
Launch	December 2022	November 2022
Target	General Consumers	Interbank Transactions
Participating Banks	10+ major banks	9 major banks
Transaction Volume	Expanding	Used for govt bond settlement

India's Strategic Intent

Cash Cost Reduction: Cash management costs ~0.5% of GDP
Financial Inclusion: Access for unbanked population
International Settlements: Foundation for rupee internationalization
Crypto Competition: Alternative to private cryptocurrencies

FedNow vs Digital Dollar: United States

The US has taken the most cautious stance among major countries toward CBDC development:

FedNow: Instant payment system launched 2023 (not a CBDC)
Digital Dollar: Research stage, politically divided debate
Republican Opposition: Privacy concerns, government surveillance wariness
Democratic Caution: Financial stability, banking system impact
Fed Stance: Will not issue without Congressional approval

US delay in CBDC development could impact the dollar's international status. As other countries develop CBDC-based cross-border payments, the US risks being left behind. However, US values of privacy and freedom may also be reflected in CBDC design.

Design Approach Comparison

CBDC design reflects each country's policy goals and values.

Key Design Elements

Design Element	Options	Trade-offs
Architecture	Direct / Indirect / Hybrid	Efficiency vs. Banking System Preservation
Technology Base	DLT / Traditional Database	Decentralization vs. Scalability
Privacy	Full Anonymous / Managed / Full Transparent	Privacy vs. AML/CFT
Interest	Interest-bearing / Non-interest	Monetary Policy Effect vs. Bank Deposit Outflow
Holding Limits	Limited / Unlimited	Financial Stability vs. Convenience
Offline Function	Yes / No	Resilience vs. Security

Country-by-Country Design Comparison

Country	Architecture	Privacy	Holding Limit	Offline
China	Two-tier (Indirect)	Managed Anonymity	Tiered	Yes
Eurozone	Hybrid	High Priority	~3,000 EUR	Yes
India	Two-tier	Moderate	Under Review	Under Review
Bahamas	Hybrid	Moderate	8,000 BSD	No
Nigeria	Two-tier	Low	Tiered	No

Cross-Border Payment Initiatives

Experiments connecting multiple countries' CBDCs are progressing:

mBridge Project

Participants: China, Thailand, UAE, Hong Kong (BIS Innovation Hub)
Purpose: Demonstrate multi-CBDC interoperability
Results: Demonstrated real-time, low-cost international payments
Challenges: Regulatory harmonization, AML/CFT, geopolitical concerns

Project Dunbar

Participants: Australia, Malaysia, Singapore, South Africa
Purpose: Multi-currency settlement platform development
Features: Multiple CBDC use on common platform

Challenges and Concerns

CBDC introduction faces numerous technical and social challenges.

Privacy and Surveillance

Concerns: Risk of all transactions visible to government
China Model Wariness: Potential linkage with social credit system
Countermeasures: Small transaction anonymity, offline function
Balance: Trade-off with AML/CFT requirements

Financial System Impact

Impact	Concern	Countermeasure
Bank Deposit Outflow	Shift of funds to CBDC	Holding limits, non-interest design
Bank Revenue Pressure	Reduced payment fee income	Bank-intermediated model
Bank Runs	Rapid fund movement during crises	Conversion limits, fees
Monetary Policy Transmission	Changes to traditional channels	Careful design, phased rollout

Technical Challenges

Scalability: Processing capacity for billions of users
Resilience: Resistance to cyberattacks and system failures
Interoperability: Connecting different CBDC systems
Offline Function: Technical difficulty of preventing double-spending

Geopolitical Concerns

Dollar Hegemony Challenge: De-dollarization via CBDC
Sanctions Avoidance: Use as payment route outside SWIFT
Tech Hegemony: CBDC infrastructure standardization competition
Fragmentation Risk: West vs China-Russia CBDC bloc formation

Investment Implications

CBDC proliferation has multi-faceted impacts on financial markets and investment strategy.

Impact by Sector

Sector	Impact	Examples
Banks	Revenue pressure risk, adaptation needed	Reduced payment fees, deposit outflow
Payment Companies	Both threat and opportunity	Visa, Mastercard, PayPal
Fintech	New opportunities	CBDC-compatible wallet development
Cryptocurrency	Intensified competition	Impact on stablecoins
International Remittance	Disruption	Western Union, Wise

Forex Market Impact

Settlement Efficiency: Potential for lower transaction costs, improved liquidity
Dollar Status: Potential long-term reduction in dollar demand
Emerging Market Currencies: Enhanced currency credibility in CBDC-adopting countries
Volatility: Flow changes from instant settlement

Investment Strategy Implications

Bank Stock Selection: Favor banks with CBDC adaptation capability
Payment Stocks: Identify winners and losers in CBDC era
Fintech Investment: Companies developing CBDC-related technology
Crypto Reassessment: Analyze coexistence/competition with CBDCs
Currency Diversification: Attention to CBDC-advanced country currencies

Companies and ETFs to Watch

Payment Infrastructure: Visa, Mastercard (watch adaptability)
Fintech: Block, PayPal, Ant Group
Blockchain: R3, ConsenSys (private)
ETFs: Fintech ETFs, Blockchain ETFs

Future Outlook and Scenarios

CBDC proliferation has the potential to significantly transform the financial system over the next 10-20 years.

Short-term (2024-2026)

China's digital yuan expands domestic adoption
India, Brazil pilots ramp up
Digital Euro issuance decision (2025)
Cross-border experiment progress
US likely to remain in research stage

Medium-term (2027-2030)

Major countries begin retail CBDC operations
International settlements via CBDC become serious
International transactions in non-dollar currencies increase
Relationship with private crypto becomes clear
Privacy and surveillance debates deepen

Long-term Scenarios

Scenario	Probability	Content
Fragmented	35%	Different CBDC blocs for West vs China-Russia
Interoperable	40%	Interconnection based on international standards
Dollar Continued Dominance	15%	Dollar maintains status despite US CBDC delay
Private Dominance	10%	Stablecoins more widespread than CBDCs

Implications for Japan

The Bank of Japan is advancing digital yen research, with an issuance decision expected around 2026:

Status: Proof-of-concept Phase 2 complete, Phase 3 underway
Challenges: Elderly population accommodation, coexistence with cash culture
Opportunities: Digitalization promotion, international settlement efficiency
Risks: Falling behind China, yen's international status

CBDC could become one of the most important transformations in currency history. However, its impact varies greatly depending on design. Whether we can create currency fitting the digital age while protecting privacy and maintaining financial system stability is the question. Investors need discerning eyes to monitor this transformation process and identify winners and losers.

CBDC is a crucial technological innovation shaping the future of currency and payments. As of 2024, China leads while Europe and Asia follow, with this structure becoming clear. Investors should understand CBDC's impact on the financial sector and reflect this in investment decisions for bank stocks, payment companies, and fintech firms. Long-term, the impact on forex markets and the dollar's reserve currency status should also be monitored. This field is rapidly evolving, making continuous information gathering essential.