How Have Digital Currencies Worked Around the World?

Despite the potential benefits of a U.S. CBDC, it remains a concept for now. Around the world, other countries are a little further along with digital currencies.

According to the Atlantic Council’s GeoEconomics Center’s Central Bank Digital Currency (CBDC) Tracker, 10 countries have fully launched a digital currency, and China is on course to expand from its pilot CBDC in 2023.

China’s digital yuan, one of the largest CBDC programs, launched its pilot project in 2014.

“They are testing a pilot in five cities. They gave out millions in currency through lotteries just to prove it works,” according to Cunha. People who win the lottery receive free CBDC, which they can spend at local shops that accept it.

While it’s not at a national scale yet, once China has the platform ready, it will expand through banks and mobile providers like Alipay.

The central banks of China and the United Arab Emirates are also working on a project to use blockchain and CBDC for regional payments between nations. If these projects are a success, they could give more motivation to other nations to create their own CBDC.

Because of these trends, Lilya Tessler, head of Sidley’s FinTech and Blockchain group, is optimistic about the future use of digital currencies. “We certainly will see mass adoption of digital currencies, but it is difficult to predict how it will look. CBDC may replace the paper version of the U.S. dollar. At the same time, society may focus on mainstream adoption of a decentralized cryptocurrency.”

If India adopts a digital currency, it would work as an alternative to cash but would also have the built-in advantage of quick money transfer since it’s electronic. Even though a digital currency would be electronic, it still needs to be as accessible as cash.

There’s a lot to be done and a lot of industry input needed, but it could be well worth the investment.