In recent years, the global financial landscape has undergone significant changes due to the rise of digital currencies, blockchain technology, and decentralized finance (DeFi). One of the most significant developments in this space has been the growing interest in Central Bank Digital Currencies (CBDCs). CBDCs are a form of digital currency issued and regulated by a country’s central bank, and they have become a key area of focus for many nations around the world. In this article, we will explore how many countries are currently working on CBDCs, why they are important, and the implications they could have on the global financial system.
Understanding Central Bank Digital Currencies (CBDC)
A Central Bank Digital Currency (CBDC) is a type of digital currency issued by a country’s central bank. Unlike cryptocurrencies such as Bitcoin and Ethereum, which are decentralized and not controlled by any central authority, CBDCs are centralized and fully regulated by the government. CBDCs are intended to function as legal tender, just like traditional fiat currencies (e.g., the US Dollar, Euro, or Japanese Yen), but they are in a digital format.
There are two main types of CBDCs:
Retail CBDC: This type of CBDC is intended for use by the general public, similar to the way we use physical cash today. Retail CBDCs allow consumers to make payments, store value, and engage in digital transactions.
Wholesale CBDC: This type of CBDC is designed for use by financial institutions and banks to settle large-scale transactions between them. Wholesale CBDCs could be used to improve the efficiency and security of cross-border payments and interbank transfers.
The development of CBDCs is seen as a response to the growing popularity of private cryptocurrencies and the increasing demand for digital payment systems. Governments and central banks are considering CBDCs as a way to modernize the financial system, improve payment efficiency, reduce costs, and maintain control over monetary policy in the digital age.
The Global Interest in CBDCs
The interest in CBDCs has grown rapidly over the past few years, with many central banks around the world exploring their potential benefits. According to a 2021 survey by the Bank for International Settlements (BIS), over 80% of central banks worldwide were researching CBDCs, with some already conducting pilot programs and experiments.
The rise of cryptocurrencies like Bitcoin and Ethereum has raised concerns for central banks, as these decentralized currencies can potentially undermine the role of traditional central banks in controlling money supply and implementing monetary policy. Additionally, the increasing use of digital payment systems has prompted governments to consider developing their own digital currencies to stay competitive and maintain control over their financial systems.
How Many Countries Are Working on CBDCs?
As of 2025, the number of countries working on CBDCs has grown significantly. While many countries are still in the research or testing phase, several nations have made substantial progress toward launching their own digital currencies. Let’s break down the countries that are actively working on CBDCs and the progress they have made.
1. China
China has been a pioneer in the development of CBDCs and has made significant strides toward launching its digital currency. The People’s Bank of China (PBOC) has been working on its digital currency, known as the Digital Yuan (e-CNY), since 2014. It is one of the most advanced CBDC projects in the world, with extensive testing and piloting already underway in various cities, including Beijing, Shenzhen, and Chengdu.
The Digital Yuan is designed to be used for everyday transactions, such as payments for goods and services, and is intended to replace cash in circulation. China has already conducted millions of transactions using the Digital Yuan and continues to expand its pilot programs. The government aims to launch the Digital Yuan nationwide in the near future, with the potential to play a key role in China’s economy and international trade.
2. European Union
The European Central Bank (ECB) has been actively researching the possibility of introducing a Digital Euro. While the ECB has not yet launched a full-scale CBDC, it has initiated the investigative phase of the Digital Euro project. In October 2020, the ECB published a report outlining its plans to explore a digital euro and began a public consultation process to gather feedback from stakeholders.
The Digital Euro would be a retail CBDC and could potentially be used for everyday payments, enhancing the efficiency and security of transactions within the Eurozone. The ECB has emphasized that the Digital Euro would coexist with physical cash and be designed to complement the existing European financial system rather than replace it.
The ECB is currently conducting experiments and prototypes to assess the technical and regulatory aspects of a Digital Euro. A decision on whether to proceed with a full-scale rollout of the Digital Euro is expected within the next few years.
3. United States
The United States has not yet launched a CBDC, but the Federal Reserve has expressed interest in exploring the potential benefits and risks of such a digital currency. In 2021, the Federal Reserve published a discussion paper on the topic of a Digital Dollar, inviting public feedback on the potential design and implementation of a CBDC.
The U.S. government has also been examining the implications of a Digital Dollar for monetary policy, financial stability, and privacy. While the Federal Reserve has not made any definitive decisions regarding the creation of a CBDC, it has acknowledged the growing importance of digital currencies and is closely monitoring developments in other countries.
Several U.S. lawmakers and policymakers have expressed support for the creation of a Digital Dollar, citing the need to modernize the payment system and address the challenges posed by private cryptocurrencies. However, there is still significant debate over the potential risks and benefits of a CBDC in the U.S., and further research is expected before any official decisions are made.
4. Sweden
Sweden is one of the most advanced countries in terms of exploring CBDCs. The e-Krona project, led by the Sveriges Riksbank (Swedish central bank), has been in development since 2017. Sweden has seen a significant decline in cash usage in recent years, with many consumers opting for digital payment methods. As a result, the Riksbank has been exploring the idea of issuing a central bank-backed digital currency to ensure financial inclusion and preserve the stability of the Swedish payment system.
The e-Krona is still in the pilot phase, with ongoing testing and experiments to evaluate its potential use in the Swedish economy. The Riksbank has stated that it aims to issue the e-Krona if the demand for digital payment methods continues to grow. However, the project is still in the early stages, and no official launch date has been set.
5. Japan
Japan is another country that has shown significant interest in CBDCs. The Bank of Japan (BOJ) began its research into the feasibility of a CBDC in 2020. In 2021, the BOJ launched a pilot program to test the digital yen, focusing on its design, technical aspects, and integration with the current financial system.
The Japanese government has expressed interest in a CBDC as a means to ensure payment system stability and to address the increasing popularity of private cryptocurrencies and digital payment platforms. The Bank of Japan is closely monitoring global developments in CBDCs and plans to continue its research and experimentation before making any decisions on a full-scale rollout.
6. United Kingdom
The Bank of England (BoE) has also been exploring the potential of a CBDC, with discussions about a Digital Pound gaining momentum in recent years. In 2020, the Bank of England began consulting with stakeholders and conducting research on the potential benefits and risks of a Digital Pound. The BoE has emphasized that a CBDC would need to be designed in a way that maintains financial stability, privacy, and the integrity of the monetary system.
The UK government has indicated that it is committed to exploring the idea of a Digital Pound, but the country is still in the early stages of research and development. There are no concrete plans for a full-scale launch at this time, but the government is actively monitoring developments in other countries and is open to public input on the matter.
7. India
India, one of the largest economies in the world, has also shown significant interest in CBDCs. The Reserve Bank of India (RBI) has been exploring the possibility of launching a digital rupee. In 2021, the Indian government announced that it would conduct a pilot program for a CBDC, with the goal of improving payment efficiency and reducing the reliance on physical cash.
The RBI has indicated that it is working on the technical aspects of the digital rupee and is studying the potential impacts on monetary policy, financial stability, and the banking system. While there is no official timeline for the launch of the digital rupee, India’s large population and growing digital economy make it an important player in the global CBDC race.
8. Other Countries
In addition to the countries mentioned above, many other nations are actively exploring CBDCs, including:
Canada: The Bank of Canada has been conducting research into the possibility of a digital Canadian dollar and has been collaborating with other central banks on cross-border payment solutions.
South Korea: The Bank of Korea has been conducting research on a digital won and has completed several pilot programs to assess the feasibility of a CBDC.
Brazil: The Central Bank of Brazil has launched a project to study the potential of a digital real and has initiated consultations with stakeholders.
Russia: The Central Bank of Russia has been researching the possibility of a digital ruble and has conducted trials with commercial banks.
Many other countries, including Australia, Singapore, and Saudi Arabia, are also exploring CBDCs and have launched pilot programs or research initiatives.
Why Are Countries Exploring CBDCs?
There are several reasons why countries are exploring the development of CBDCs:
Financial Inclusion: CBDCs can help provide access to digital financial services for people who are unbanked or underbanked, particularly in developing countries.
Improved Payment Systems: CBDCs could help improve the efficiency, security, and cost-effectiveness of national payment systems. They could enable faster and cheaper cross-border payments and reduce the need for intermediaries.
Monetary Policy Control: CBDCs would give central banks more direct control over the money supply, enabling them to implement monetary policy more effectively.
Competition with Cryptocurrencies: Governments are concerned about the rise of private cryptocurrencies, which operate outside the control of central banks. CBDCs could provide a government-backed alternative that offers similar benefits to cryptocurrencies but with greater stability and regulatory oversight.
Innovation and Technological Advancement: The development of CBDCs is seen as an opportunity to modernize the financial system and keep up with technological advancements in blockchain, digital payments, and decentralized finance.
Conclusion
As of 2025, over 100 countries are researching or actively developing Central Bank Digital Currencies (CBDCs). The global trend toward CBDCs reflects the growing recognition of the need to modernize the financial system, improve payment efficiency, and maintain control over monetary policy in the digital age. While some countries, such as China, Sweden, and the European Union, are further along in their CBDC development, others, like the United States and India, are still in the early stages of research and experimentation.
The rise of CBDCs could have significant implications for the global financial system, including increased financial inclusion, more efficient payment systems, and a potential shift in the way money is used and managed. As central banks continue to explore the potential of CBDCs, we can expect further developments and discussions in the years to come. The adoption of CBDCs will likely reshape the future of digital finance and play a key role in the global economy for years to come.
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