Policy drivers for a retail CBDC

Written by Jannah Patchay Executive Director and Policy Lead at the Digital Pound Foundation (DPF)

Central bank digital currencies (CBDCs) - a digital form of central bank-issued fiat currency - have seen an explosive growth in interest over the past four years.  At the start of 2023, 114 countries, representing 95% of global GDP, are currently exploring CBDCs, of which 60 are in an advanced stage of development, pilot or launch, with 11 having fully launched a CBDC. This does not include China’s pilot, which currently reaches 260 million users and is expected to expand to most of the country in 2023.

Source: Digital Pound Foundation

Policy drivers and motivations

Each of these jurisdictions has its own unique blend of policy drivers and motivations. For the Bahamian Sand Dollar - the world’s first fully live CBDC, launched in October 2020 - introduction of a CBDC addressed the logistical issues involved in distributing cash to ATMs across nearly 700 islands (particularly during a pandemic), and modernising the country’s financial infrastructure. For Nigeria’s e-Naira, financial inclu…