Central banks around the world are increasingly exploring digital currencies, with 134 countries now looking into the possibility of launching their own central bank digital currency (CBDC). A new study from the US-based think tank Atlantic Council reveals that 66 of these countries are in the advanced phase of exploration, with some already in the process of developing or piloting their own digital currencies.
Unlike cryptocurrencies such as Bitcoin, a CBDC is backed by a country’s national bank and is intended to provide a secure and government-backed digital form of fiat currency. The European Central Bank (ECB) recently launched the digital euro project, which aims to offer a universally accepted digital currency option that complements cash payments within the euro area.
The digital euro project is still in its preparation phase, with the ECB focusing on developing rules to regulate digital currency payments, ensuring user privacy, and safeguarding against fraud and cyber-attacks. If implemented, users will be able to set up digital euro wallets through banks or post offices and use them to make transactions while retaining the option to pay with cash if they prefer.
The study also highlights that the move towards digital currencies is driven by the increasing digitization of money and payments, with central banks recognizing the need to adapt to the changing financial landscape to stay relevant and provide a public currency option. With interest in digital currencies on the rise, the future of money is increasingly looking to be digital.
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