A report from a survey by global bank Citi has reaffirmed the need for CBDC pilots, as it claims digital fiat money could fasten financial settlements
Global financial services corporation Citi has conducted a survey that has brought out an encouraging scenario for CBDC adoption. According to the Citi survey, central bank digital currencies (CBDCs) could help in faster financial settlements.
The Citi survey highlighted how countries worldwide tried to implement shorter settlement cycles. It stated how India had already started T+1 financial settlements. All transactions for trade will conclude within 24 hours in the country, according to the rule. The report said that developed economies like the US and Canada also worked in this direction.
According to the survey, 87% of the responses said CBDCs were viable for quick financial settlements. With the findings, the Citi survey also described how CBDC pilots could be a way for better adoption.
“From earlier domestic pilots, recent crossborder multi-bank experiments are now providing detailed insights into how central bank funding can be operationalized in a digital context, both internally and across entire markets. In this year’s survey, 52% of market participants expect CBDCs to be live within three years,” stated the survey.
Further, it listed various factors that could hinder CBDC adoption. It listed reasons like regulatory uncertainties, limited experience and knowledge, interoperability, and scalability. But, it also mentioned how institutional investors, banks, and asset managers had the ability to drive CBDC adoption in the next few years.
It implied that by 2028, digital ledger technology (DLT) could become mainstream. The Citi survey has also come at a favorable time when central banks worldwide have pushed for CBDCs.
Days back, the Reserve Bank of Australia announced the various use cases of CBDCs. The Australian digital dollar had been in the works for a long time. Countries like Russia, China, and Columbia have pushed forward with their respective CBDCs.
Columbia’s central bank released a report based on its CBDC research recently. Meanwhile, Russia’s President accorded his approval for a CBDC law in the country. The Bank for International Settlements has also created a CBDC framework, with contributions from multiple countries.
But, the European Union has been the most progressive region for CBDC adoption. Apart from having clear rules for crypto, it has also gained pace in adopting digital fiat money. Central banks of various European countries have supported the initiatives.
The Bank of England has created an encouraging timeline for its CBDC, and it is on schedule. The French Central Bank, Banque de France, has also been conducting CBDC experiments as part of its strategy.
Switzerland’s central bank also made its intentions with CBDCs public a while back. The country, a hotbed of financial services, could be a critical focal point for CBDC adoption.