Crypto Survey Finds CBDC Transactions to Reach Over By $213 Billion Per Year
Juniper Research, an entity dedicated to conducting crypto and other surveys has compiled a survey report. The survey was dedicated to the use of Central Bank Digital Currencies (CBDCs) for executing transactions globally.
The findings in the survey revealed that CBDC-based transactions are rapidly increasing worldwide. The world has recognized the importance of moving financial systems to the digital world and virtual accessibility.
The major economies from around the world are aiming to grow bigger and take the lead in the digital world.
Most countries want to finalize trade deals in digital currencies such as China, Russia, and many more. Thus, the adoption level of CBDCs has been rising across the board.
It further suggested that by 2030, it is expected that CBDC transactions would increase by at least $213 Billion per year.
CBDCs and Their Future Scope
A CBDC is a digital currency that is based on blockchain and is very much the same as any other digital currency in existence.
However, the big difference between a digital currency like Bitcoin and CBDC is that the latter is issued by a central bank.
While, in the case of cryptocurrencies, they are issued privately and free from control by a central bank.
The concept of CBDC came into existence only a couple of years back. For the time being, there are only a handful of CBDCs available in the world which has been issued by their respective central banks.
Even central banks of the US, UK, Japan, Europe, India, etc. are also in the final stages of launching their CBDCs.
Current Status of CBDCs Worldwide
Currently, 90% of the global states are working on their own CBDC projects.
Jamaican central bank was the first which first launched the country’s national CBDC i.e. JAM-DEX and gave it legal tender.
Similarly, the Nigerian ‘e-Naira’ was the first CBDC in the African region launched by the Central Bank of Nigeria (CBN) in 2021.
Apart from the two, there are more than a dozen CBDCs available in the world right now but none have been given legal tenders yet.
It was hence noted in Juniper Research’s survey that right now CBDC transactions’ volume is no more than $100 Million globally.
This means that from the current status of CBDC transactions, the increase would be around 260,000% by the time 2030.
Why the volume is so low currently because of the fact that the majority of CBDCs are undergoing pilot testing. Most of them haven’t yet been officially launched to be used by the masses without any restrictions.
Adoption of CBDCs Discussed In the Survey
According to the survey, the use of CBDCs is destined to make efficient the existing digital payment methods. This would greatly help those states whose economies are regarded as ‘emerging economies.
Hence, massive adoption of CBDCs is expected which would be boosted by central banks when they would merge CBDCs into usual financials.
Further Observations Made In the Survey
Juniper Research’s study further showed that by 2030, at least 92% of CBDC transactions would be executed at the domestic level.
This finding is however contrary to what had been suggested in another recent survey. In the earlier survey, it was estimated that 100% of digital transactions were to be executed through CBDCs.
However, there are numerous challenges with regard to digital payments through CBDCs which remain to be addressed by central banks.
The first challenge for the central banks is to lay down the required infrastructure for facilitating digital payments using CBDCs. Thereafter, the next challenge would be to use CBDCs for cross-border payment settlements.
Currently, cross-border transactions cost hefty deductions and take at least two days to complete. On the other hand, digital payments are instant and non-costly and therefore would be highly beneficial in the future.