The Reserve Bank of India recently launched the central bank digital currency (CBDC) in a pilot mode. But India isn’t the only country exploring the potential of CBDC.
Countries which make up 95 per cent of the global GDP are exploring CBDC. In fact, 16 of the 20 countries that make up the G20 Group are already in the development or pilot stage of a CBDC.
Incidentally, it was countries outside of these group that first launched CBDCs.
Bahamas was the first economy to launch its nationwide CBDC — Sand Dollar. Nigeria followed suit with eNaira in 2021, with Jamaica being the latest to join the list with JAM-DEX, according to the Background Paper on “Central Bank Digital Currency: A Digital Revolution” by PHD Chamber of Commerce and Industry.
Countries Which Launched CBDC
The Bahamas launched CBDC in October 2020 with Sand Dollar, and then Nigeria came out with eNaira in October 2021. Jamaica recently launched JAM - DEX in June 2022.
As of now, a total of three countries have launched CBDC. Bahamas’ GDP for 2023 is projected at 4.1 per cent, whereas both Nigeria and Jamaica are expected to grow at 3 per cent. Among the three, Nigeria has the largest economy in terms of size with GDP of $504.2 billion in 2022.
Countries That Are In Pilot Stage of CBDC
On November 1, 2022, India commenced issuing digital currency in the wholesale segment, known as digital rupee -Wholesale (e₹-W), and on December 1, 2022, RBI introduced it in the retail segment known as digital Rupee -Retail (e₹-R) through a few banks it had identified for the pilot project.
“China was the first large economy to pilot a CBDC in April 2020 and it aims for widespread domestic use of the e-CNY by 2023,” says PHD Chamber report.
The report further notes that other countries that are in the pilot stage are Ghana, Canada, the UAE and Saudi Arabia (working on same digital currency project), Sweden, Uruguay, Australia, Hong Kong, Singapore and Kazakhstan. Eastern Caribbean nations have also come up with DCash as their digital currency.
“As per the Atlantic Council, there are eight countries that have launched digital currency in ECCU, but there are several other countries among ECCU that are exploring CBDC before completely launching it in their economies,” the report says.
Ajay Kumar Choudhary, executive director, Reserve Bank of India, said that as of 2021, and according to the CBDC tracker, almost 105 countries representing 95 per cent of the world GDP have taken steps to inculcate digital currency in their ecosystem. Around 50 countries are at the advanced phase of exploration to launch the digital currency, while 10 countries have fully launched the digital currency, he adds.