The OMFIF Digital Money Institute’s annual survey of central bank governors and cryptocurrency regulators has shown declining enthusiasm for central bank digital currencies (CBDCs) as part of the cross-border settlement market. According to the survey, in 2024, only 10% of central banks continued to work on CBDC, while in 2023 more than 20% of those surveyed were doing so.
The growth in cross-border payments activity continued, but rather than exploring CBDC payment options, almost half of those surveyed preferred the US-based FedNow Service, a fast payment system developed by the US Federal Reserve. According to OMFIF, about 47% of respondents would prefer to use FedNow to streamline cross-border payments. The popularity of CBDC in this context was only 13%, although last year this figure reached 31%.
OMFIF experts suggested that the change in priorities could be due to political motives. The alternative mBridge project, launched in 2021 by the central banks of China, Hong Kong, Thailand, the United Arab Emirates and Saudi Arabia, lost one of its most active participants is the Bank for International Settlements (BIS).
“While the mBridge project remains the most advanced multi-currency CBDC platform, declining central bank confidence in the project initiated by the People’s Bank of China is likely due to geopolitical concerns and a growing awareness of the challenges of implementing the concept, especially in the area of governance,” the report said. OMFIF.
In early November, BIS CEO Agustin Carstens announced BIS’s withdrawal from the project after answering a question about whether mBridge could become a basis for BRICS countries, including Russia, to circumvent international sanctions.
“mBridge is not a bridge for BRICS, and I must state this categorically. mBridge was not created to meet the needs of BRICS,” Carstens said.
OMFIF added that, like last year, none of the respondents named stablecoins as the most promising area for improving cross-border payments.
Earlier, a member of the US Federal Reserve Board of Governors, Christopher Waller, said at the Global Fintech Fest conference that banks do not need to speed up mutual settlements, and the degree of benefit of the so-called wholesale digital currency of central banks for cross-border payments is exaggerated.
Source: Bits
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