CBDC launch delays hit nearly one-third of central banks

A recent survey reveals that nearly a third of central banks have postponed their plans to launch central bank digital currencies (CBDCs).

The Official Monetary and Financial Institutions Forum (OMFIF) and Giesecke+Devrient Currency Technology's report, published on February 11, surveyed 34 central banks, highlighting that while some are proceeding, approximately 31% have delayed their CBDC implementation.

The primary reasons cited for these delays include regulatory and governance framework concerns, as well as pressing economic challenges.

In one instance, an inflation spike and debt distress were noted as reasons for delaying a central bank's issuance timeline.

Some banks are also scaling back CBDC research to prioritise other payment issues.

Interestingly, technical challenges are no longer seen as major obstacles.

Prior surveys had identified offline payments, privacy, and interoperability as key barriers, but this year's findings indicate significant progress in these areas.

However, user privacy remains a contentious issue due to the extensive collection and analysis of personal data.

The survey also indicated a shift in sentiment, with only 18% of central banks now more inclined to issue a CBDC, a significant drop from 38% in 2022.

Conversely, 15% are less inclined, compared to none in 2022.

Despite these shifts, the majority of surveyed central banks still anticipate issuing a CBDC in the coming years.

According to the Human Rights Foundation, CBDCs offer the potential to enhance payment efficiency and broaden financial inclusion, especially for those with limited access to traditional financial systems.

However, concerns remain about potential infringements on privacy and new avenues for government corruption.