Behind the Scenes of Central Bank Digital Currency: Emerging Trends, Insights, and Policy Lessons (IMF Fintech)

Summary

• In late 2021, the Central Bank of The Bahamas recorded around 20,000 active Sand Dollar wallets within a population of about 400,000.p.7
• By October 2021, China recorded over 123 million e-CNY wallets registered to individuals and about 9.2 million wallets held by firms.p.7
• Approximately 20 percent of the adult population in the Bahamas is estimated to have no bank account.p.9
• The People's Bank of China estimates that around 10 percent of the Chinese population still lacks access to basic financial services.p.9
• The Banco Central de Uruguay capped its e-peso pilot issuance at 20 million e-pesos for no more than 10,000 end-users.p.26
• The Sand Dollar pilot encompassed around 2,000 wallets and involved 35 central bank staff members at its launch.p.27

Key insights

1. Central banks explore retail CBDCs primarily to modernize payment systems and future-proof infrastructure against private sector digital disruption.p.9
2. All surveyed central banks are converging on an intermediated operating model where the central bank issues money and private entities interface with end-users.p.13
3. Active CBDC implementations employ unremunerated structures and quantitative holding caps to prevent commercial bank disintermediation and bank runs.p.17
4. Tiered wallet structures with low transaction limits allow simplified identity verification, balancing user privacy with compliance requirements.p.19
5. Developing robust offline payment capability has proven complex, compelling central banks to explore physical and hardware-based solutions.p.18
6. Central banks favor interoperability between distinct domestic CBDC systems over creating a single global currency for cross-border transactions.p.20
7. Choice of architecture varies, with some institutions selecting distributed ledger technology while others adopt hybrid centralized systems.p.21
8. Enabling official CBDC issuance typically requires statutory amendments to central bank charters to clarify legal tender status for digital money.p.23