Nearly half (47%) of the central banks surveyed prefer these solutions, a slight increase from last year.
CBDCs Lose Favor as Central Banks Turn to Stablecoins and Tokenization
In contrast, CBDCs have fallen out of favor. In 2023, 31% of central banks showed interest in CBDCs, but that number dropped to just 13% in 2024. This shift comes as central banks reconsider their interest in blockchain-based solutions.
The survey also highlights the growing importance of stablecoins and tokenization in the future of payments. However, stablecoins received zero votes in the survey, indicating they still have little support among central banks. The Bank for International Settlements (BIS) recently pulled out of a project called mBridge, which was exploring the use of CBDCs for cross-border payments. This move was seen as a response to concerns over geopolitical issues, but the BIS denied any political reasons behind it.
With projects InthanonLionRock2, Jura, Dunbar and mBridge, the #BISInnovationHub is leading practical experiments to show how #CBDCs could make cross-border payments faster, cheaper and more transparent. A new report connects the dots on these experiences: https://t.co/IDp0bKtejP pic.twitter.com/JtSih8QkvC
— Bank for International Settlements (@BIS_org) June 21, 2022
Even with this, the US dollar remains the dominant currency for international payments. Only 11% of central banks are reducing their use of the dollar. This continues to be seen as a haven amidst global uncertainties.
Tokenization Gains Traction, But Traditional Payment Systems Remain Key
While the traditional correspondent banking system is facing challenges, such as rising costs due to stricter regulations, tokenization is gaining interest. Tokenization refers to the process of turning assets into digital tokens, making it easier to track and transfer. Over 40% of central banks in developed countries see promise in tokenization and plan to explore it further in the next few years.
BlackRock’s CEO Larry Fink predicts tokenization of financial assets as the next ETF revolution step, enabling instant settlements, lower costs, customized strategies, and transparent voting. $nsdx pic.twitter.com/JOlYhLgZoh
— NASDEX (@nasdex_xyz) November 18, 2024
Despite this interest in blockchain and tokenization, the survey suggests that cross-border payments will likely continue to rely on traditional payment systems for the time being. The BIS’s Project Nexus is working on a platform that will connect different instant payment systems, further cementing the role of legacy systems in international transactions.
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