CBDC Transactions to Surpass $210 Billion in Less Than a Decade (Study)

A recent study con­duct­ed by the ana­lyt­ics com­pa­ny Juniper Research esti­mat­ed that pay­ments via cen­tral bank dig­i­tal cur­ren­cies (CBD­Cs) could reach $213 bil­lion by 2030. 

The firm believes gov­ern­ments across the globe will use the prod­uct to boost finan­cial inclu­sion and improve the mon­e­tary con­di­tion of emerg­ing economies.

A Possible Boom of CBDC Transactions

Juniper Research experts ana­lyz­ing the fin­tech and pay­ments mar­ket believe CBDC trans­ac­tions could sky­rock­et from $100 mil­lion in 2023 to $213 bil­lion by 2030 (a stag­ger­ing 213,000% increase). 

The spe­cial­ists said the finan­cial prod­uct is still in its ear­ly days, adding that glob­al cen­tral­ized author­i­ties will focus on it to improve dig­i­tal set­tle­ments and enable addi­tion­al mon­e­tary ser­vices. How­ev­er, they might also use it to obtain con­trol over the con­sumers’ finances and super­vise their activities.

The research fur­ther deter­mined that by 2030, 92% of the total val­ue trans­act­ed via CBD­Cs will be paid local­ly. At a lat­er stage, the tool could start set­tling cross-bor­der set­tle­ments. Report author Nick May­nard commented:

“While cross-bor­der pay­ments cur­rent­ly have high costs and slow trans­ac­tion speeds, this area is not the focus of CBDC devel­op­ment. As CBDC adop­tion will be very coun­try-spe­cif­ic, it will be incum­bent on cross-bor­der pay­ment net­works to link schemes togeth­er, allow­ing the wider pay­ments indus­try to ben­e­fit from CBDCs.”

The poten­tial launch of CBD­Cs is usu­al­ly sup­port­ed by gov­ern­ment offi­cials and cen­tral bankers who believe they will be a bet­ter solu­tion than bit­coin. Janet Yellen – Trea­sury Sec­re­tary of the Unit­ed States – is a pro­po­nent of that the­sis, argu­ing that a dig­i­tal dol­lar could out­com­pete BTC, which has “high fees and slow­er pro­cess­ing times.”

Most cryp­to sup­port­ers, on the oth­er hand, are against CBD­Cs, opin­ing that cen­tral­ized insti­tu­tions will employ them to increase their con­trol of people’s cash flows. Adam Back – CEO of Block­stream – said last year that these prod­ucts are worse than bank accounts, while bit­coin is an “apo­lit­i­cal, bear­er, unseiz­able money.” 

Who Has Joined the CBDC Race?

Chi­na is the coun­try that pops up imme­di­ate­ly when talk­ing about CBD­Cs since its gov­ern­ment has launched mul­ti­ple ini­tia­tives to pop­u­lar­ize its dig­i­tal yuan over the past few years. 

It dis­trib­uted $4.6 mil­lion worth of e‑CNY to the res­i­dents of Cheng­du and over $6 mil­lion to those of Bei­jing at the begin­ning of 2021. The author­i­ties also spread the adop­tion to the cit­i­zens of Shen­zhen in 2022, giv­ing away $2.3 mil­lion in dig­i­tal yuan to them.

Chi­na even allowed CBDC pay­ments dur­ing the Bei­jing Win­ter Olympic Games last year. This trig­gered some con­tro­ver­sy between US politi­cians and their Chi­nese colleagues. 

The Amer­i­can Sen­a­tors – Mar­sha Black­burn, Roger Wick­er, and Cyn­thia Lum­mis – urged the US ath­letes to stay away from the prod­uct, while the For­eign Min­istry Spokesper­son of Chi­na – Zhao Lijian – claimed the law­mak­ers should “abide by the spir­it” of the Games and “stop mak­ing trou­ble” out of things they don’t understand.

Brazil, Japan, and South Korea have also intro­duced CBDC test­ing pro­grams to check how an upcom­ing dig­i­tal ver­sion of their respec­tive nation­al cur­ren­cy could inter­act with the local finan­cial net­work and whether it could uti­lize cross-bor­der payments.