Year in, and year out, people continue to wonder how long the crypto hype is going to continue. The volatility of the market and the crashes it has faced keep leading some to believe that the digital currency’s time has come to an end. But without fail, it always pops back up again… why?

This month at The Fintech Times we’re going to be looking at what makes digital currencies so popular. We will also be uncovering the emerging alternatives to cryptos and why the digital future looks so intriguing. Our second focus this month will be on central bank digital currencies (CBDCs). We start off by analysing which countries are leading the way in CBDC development. 

We gathered a variety of views from across the industry as we hear from Brock Pierce, Conor Svensson, Nick Drury, Bobby Pham and Cecilia Tamez on who’s driving CBDC development in 2022.

The US and UK have underdeveloped CBDC programs
Brock Pierce, Chairman at Bitcoin Foundation
Brock Pierce, Chairman at Bitcoin Foundation

Brock Pierce is the chairman of the Bitcoin Foundation, an American nonprofit corporation looking to restore Bitcoin’s reputation, and a cryptocurrency innovator. He explains what CBDCs are and which countries he believes are leading the way:

“In many ways CBDCs are identical to traditional fiat currency. What makes the CBDC distinct from traditional fiat currency is that it is digital as opposed to being denominated in physical notes. Insofar as they are simply the digital version of traditional fiat currency. CBDCs do not offer some or many of the benefits of cryptocurrencies. Examples include decentralisation and ability to drive financial inclusion by opening financial tools up to those without traditional bank account.

“Countries that have already launched CBDCs or CBDC pilot programs are the Bahamas, Jamaica, Nigeria, China as well as eight Caribbean nations that have collectively launched Dcash, a CBDC launched by the Eastern Caribbean Central Bank (ECCB). China’s digital Renminbi pilot program is set to fully launch in 2023. Currently 105 countries, collectively representing approximately 95 per cent of global GDP, are exploring CBDCs.

“According to the Atlantic Council, of all G7 nations, the US and UK have the least developed CBDC programs.

“Although the US does not have a CBDC, there are a number of digital dollar cryptocurrencies that are pegged to the US dollar. These represent an alternative to current CBDC projects and stand as a bulwark against the widespread adoption of China’s CBDC, the digital Renminbi.”

10 countries have launched CBDCs but are at different levels of maturity 
Conor Svensson is CEO and co-founder of Web3 Labs 
Conor Svensson is CEO and co-founder of Web3 Labs

Conor Svensson is CEO and co-founder of Web3 Labs, the blockchain tech company. Svensson analyses China’s CBDC development while also identifying smaller nations that have made significant strides.

“CBDCs are being embraced by both smaller and larger nations. China has made far greater progress with its digital Renminbi than any other major nation. Starting in 2020 in Shenzhen, it’s been trialled in a number of cities including Shanghai with plans afoot for other major cities and Hong Kong.

“In some of the smaller global economies, CBDCs are already active in, such as Nigeria – Africa’s largest economy – launched the eNaira last year. So far, 10 countries have fully launched a digital currency but are all at different levels of maturity.

“Surprisingly, despite being economic powerhouses, the US, ECB and UK are further behind in their CBDC development. In the UK for instance, Fnality is operating for all intents and purposes a synthetic CBDC. They are providing a Bank of England-regulated, wholesale payment infrastructure that uses blockchain technology. As it’s not managed by the Bank of England (although it is regulated by it) it’s not a classic wholesale CBDC.

“On the flip side, there are several challenges stemming to CBDCs. This includes vulnerability to cyber-attacks and the necessity of a robust regulatory framework to cover privacy, consumer protection, and anti-money laundering standards.

“Many countries are seriously exploring alternative international payment systems but there’s a long way to go to have coins that are stable in both name and nature. CBDCs will need to coexist and play nicely with the crypto and web3 ecosystems.”

Settling funds in Asia and Africa
Nick Drury, Director of Mojaloop CBDC Center of Excellence
Nick Drury, Director of Mojaloop CBDC Center of Excellence

Mojaloop CBDC Center of Excellence (COE) was formed to drive the foundation’s mission of advancing financial inclusion in emerging markets. Its director, Nick Drury, explains why CBDC development is so important:

“When we look across Asia and Africa, we can see that ongoing exploratory work into CBDCs is enabling individuals to settle funds across borders more quickly and at a lower cost. But more needs to be done to lower the costs of transactions. Especially if we want to reach the UN Sustainable Development Goal target of three per cent.

“As large assistance programs become increasingly digital in nature, settlement time and costs need to be reduced further. Covid-19 drove more countries to invest in instant payments infrastructure to send financial assistance to unbanked citizens and migrant workers. Such payments, however, represented only a fraction of the existing domestic emergencies and international assistance programs needed for G2P (Government-to-Person) and cross-border payments, according to the World Bank.

“Migrant workers sending $200 back home on a banking rail have to pay more than $18 (six per cent), is more than double the UN Sustainable Development Goal target, according to the World Bank. As part of ongoing inclusive interoperable technologies implementations, CBDCs need to play a key role in further reducing cross-border settlement costs to reach the three per cent SDG goal.

“Connecting the underlying payments rails between the Asian and African corridors can occur only if similarly-inclusive interoperable systems exist in both geographies. We need to examine how pairing CBDCs with instant payment services will enable funds to be traced to their end beneficiaries. It must also use robust anti-fraud capabilities to combat the financing of terrorism and anti-money laundering, completing transactions in near real time.”

Active CBDC testers

Bobby Pham, CMO, KardiaChain, explains how CBDC rumours are not always being thrown about due to a genuine belief of the technology being able to help. Rather, the term is used as a means to find political success. He looked at four CBDCs that have actually been implemented or tested:

“Over 100 countries are working on their CBDC development or have already launched it.

“However, many of the countries that are in the exploratory phase could simply be expressing this for political gain.

1.) The Bahamas | The Sand Dollar Project

The Bahamas has always been considered a tax haven for the wealthy and large investors.  The Crypto market attracts much of these investors, so it doesn’t surprise me that they were the first to launch CBDC.  This is likely a move to keep them as one of the attractive safe havens for wealthy investors.

2.) China | The Digital Yuan (e-CNY)

I expect them to be one of the first powerhouses to launch a CBDC.  Having its own CBDC allows the PBOC to continue monitoring financial transactions. This would’ve been more difficult for them without one.

3.) Nigeria | eNaira

Nigeria has the largest economy in Africa and the 31st globally.  With more than 200 million people, it’s filled w/ a bright, youthful population that’s been embracing technology.  I’m confident that with the addition of a CBDC, more of its population will gain access to financial services.

4.) India | Digital Rupee

The RBI has expressed some concerns over crypto assets being used for money laundering and tax evasion.  However, they also see crypto as an opportunity.  It would allow for much of its 130 million unbanked population access to financial services. In turn, this would boost the world’s fifth largest economy.”

Emerging markets vs established ones
Cecilia Tamez, chief strategy officer of money transfer systemsfor the paytech, Euronet
Cecilia Tamez, chief strategy officer of money transfer systems at, Euronet

Cecilia Tamez, chief strategy officer of money transfer systems for the paytech, Euronet, differentiates CBDC development in emerging markets and established ones:

“Some select central banks have already launched digital currencies:

  • The People’s Bank of China – Digital RMB
  • The Central Bank of The Bahamas – Sand Dollar
  • The Eastern Caribbean Central Bank – DCash
  • The Central Bank of Nigeria – e-Naira
  • The Bank of Jamaica – JamDex

“Every country has its own infrastructure challenges, populations, and unique requirements when it comes to digital currencies. There are however some prevalent benefits that have driven interest and investment in development of CBDCs. These include a desire to modernise technical payment infrastructure, reduce transaction fees and payment complexity, improve economic health through financial inclusion, curb financial crime with better payment transparency, and achieve greater control over economic policy.

“Notably, there is a pronounced divide in these motivations between emerging and established markets:

“Emerging markets want to leverage digital currencies to modernise and leapfrog hurdles presented by legacy banking and payment infrastructure. Nigeria, for example, introduced one of the first CBDCs in the world. By enabling access to the eNaira through a mobile wallet, the central bank expects to improve financial inclusion to 90 per cent of the population. This is huge for a market where 36 per cent of the population is unbanked.

“Established markets are exploring CBDCs with the intent to influence the transformation of digital payments in their country. By offering a digital alternative to cryptocurrencies, governments seek to improve the transparency, safety, and stability of their financial system. If central banks can proactively administer how CBDCs are introduced, it will enable them to shape the impact the currencies will have on economic policy.”

  • Francis Bignell

    Francis is a journalist and our lead LatAm correspondent, with a BA in Classical Civilization, he has a specialist interest in North and South America.

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