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.
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- Source: https://cryptopotato.com/cbdc-transactions-to-surpass-210-billion-in-less-than-a-decade-study/