Central Bank Digital Currencies (CBDCs) are being piloted around the world. Although many countries are still debating the advantages and disadvantages of CBDCs, others have moved to wide-scale testing both inside and outside of their borders.
There are hundreds of active partnerships, pilots and projects globally looking into the viability of CBDCs. We have chosen a few from different regions which exemplify what the progress is more generally: China, Jamaica, Australia, Ghana, and the mBridge project.
China
China has one of the most comprehensive rollouts of CBDCs. Its digital yuan, pegged 1:1 with the yuan, has been piloted in numerous cities and regions throughout mainland China.
The People's Bank of China (PBOC) has reported 180 million wallets being used throughout the pilot areas as of 31 July 2024. The digital yuan has been used across a number of sectors, from retail to public services.
China’s success with its digital wallet and CBDC is likely due to strong tech literacy in China. It’s the country with the highest number of smartphone usage after all - in 2022 it was at almost 1.04 billion. A lot of government services and banking functions already take place over the phone. Services like AliPay and WeChat make everyday shopping, transactions, and financials seamless through the phone for most of the population. The use of any form of cash has declined drastically in the last year. This has made it a perfect testing ground for a central bank digital currency.
Jamaica
Jamaica was one of the first countries in the world to use a CBDC. JAM-DEX was first minted in 2021 and began to be circulated in 2022. The National Commercial Bank (NCB) Jamaica offers digital wallets to users to trade, hold, and pay with JAM-DEX. Jamaica is otherwise a cash-dependent country, so it has not garnered much popularity. By 2022, the Bank of Jamaica attracted over 120,000 people and 2,300 merchants to open CBDC accounts, roughly 4% of the population. This grew marginally to around 7% in 2023, and in August 2024 the NCB announced that though the wallet was successful, it was ‘underutilized’.
Jamaica is not the only CBDC in the Caribbean, and also not the only one to face disinterest from its citizens. As one institution put it: ‘Regulators in the Bahamas are sick of their citizens’ reluctance to adopt a CBDC, so they’re forcing commercial banks to get on board.’
A similar thing may happen in Jamaica. Jamaica wants CBDCs to lighten the burden of cash transactions, but it may need a lot more user education before it becomes a well-known alternative.
mBridge
Countries with strong CBDC pilots such as China are beginning to join forces to trial international payments. This will be a key development that other regions and regulators are following closely, as how CBDCs interact with each other across borders will be key to their success. The most prominent project in this space is mBridge, a collaboration between the central banks of Thailand, China, United Arab Emirates, Saudi Arabia, and Hong Kong, as well as the Bank of Innovation Settlements (BIS) Innovation Hub. There are also ‘31 observing members’ learning from the project.
The mBridge ledger works the blockchain, built to facilitate real-time, peer-to-peer, cross-border payments. They have reached the MVP stage as of 2024, and will be inviting private sector entities to come on board.
Australia
The eAUD is currently in its early pilot stage. Australia’s central bank has decided to go a slightly different route from other countries and is preparing for a wholesale CBDC instead of a retail version. The decision was made by regulators, believing that the economic benefits would be more impactful than a retail version.
Wholesale CBDCs operate in a similar way to reserve accounts which commercial banks often hold with central banks. These were seen as much more of a use to the Australian economy than a retail one.
The Australian central bank is also working with the New Zealand government on their CBDC, and to understand how transactions can work across the region.
Ghana
African central banks are very interested in the idea of CBDCs, however many initial pilots have not been successful. The eNaira in Nigeria was launched in 2021, but by 2023 the interest from citizens had waned to almost nothing. In 2024, it was announced that private entities were working with the central bank to encourage better uptake. Ghana, however, is one African country that has had some success with a CBDC.
In 2021 the Bank of Ghana announced a partnership with a private company to pilot a retail CBDC known as eCEDI. Digital wallets on mobile apps were one element of the pilot, but the central bank also wanted to understand how they could function with hardware wallets, to adapt to the needs of its people better. It was announced in 2024 that the Monetary Authority of Singapore worked with the Bank of Ghana for a proof of concept called project DESFT, the Digital Economy Semi-Fundgible Token project. This facilitated cross-border transactions using stablecoins between the two countries. This cross-border pilot of eCEDI is currently ongoing but is another improvement in understanding how CBDCs will work for international transactions.
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