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Countries closing in on digital currencies but US lagging, study shows

Reuters · 8m

A study by the Atlantic Council revealed that 134 countries, representing 98% of the global economy, are exploring digital versions of their currencies. Over half of these countries are in advanced development, pilot, or launch stages. The research highlighted that all G20 countries, except Argentina, are progressing in the development of digital currencies, while the US is falling behind. Despite President Biden's order to explore a digital dollar, progress has been slow, with Federal Reserve chief Jerome Powell stating that a digital dollar is not close to happening. The divergence between central banks on Central Bank Digital Currency (CBDC) development is growing, with China, Europe, and Japan leading the way. The report also highlighted that the risk of the US lagging behind could result in a more fractured international payments system and a potential loss of global finance clout. Currently, 36 pilot projects are underway, including China's e-CNY and the European Central Bank's preparations for the digital euro. The report also mentioned the increasing focus on wholesale CBDCs and outlined 13 cross-border wholesale projects currently in progress. The BRICS member states are at advanced stages of CBDC development, and the report predicts that there will be a further push for alternative payment systems to the US dollar at the upcoming BRICS summit in Russia. It is expected that there will be major CBDC launches by 2027, with China's e-CNY being the largest and most advanced pilot.