- CBDCs and International Trade
- The Significance of the mBridge Project
- Geopolitical Factors Influencing CBDCs
In 2024, global governments have accelerated the development of Central Bank Digital Currencies (CBDCs) for wholesale use. This comes amid declining public interest in retail digital currency projects and growing geopolitical tensions.
CBDCs and International Trade
As of September 17, 2024, data from the Atlantic Council’s CBDC tracker indicates that 98% of the world’s economy is exploring or has already implemented digital versions of their national currencies. Most projects are focused on the utility of digital currencies in international banking and trade settlements rather than everyday consumer transactions.
The Significance of the mBridge Project
Projects like mBridge, which connects banks across China, Thailand, the UAE, Hong Kong, and Saudi Arabia, underscore a strategic pivot away from retail-focused digital currencies towards mechanisms that enhance the capabilities of international financial exchanges and interbank settlements. Similar steps are being taken by both BRICS and G20 nations.
Geopolitical Factors Influencing CBDCs
The development of CBDC initiatives has also been influenced by geopolitical events such as Russia’s invasion of Ukraine and the G7 sanctions. This has led to an increase in cross-border CBDC projects, reaching a record 44. These include significant efforts like the digital euro and the digital yuan.
An increasing number of countries are striving to develop and implement Central Bank Digital Currencies, driven by the desire to improve international financial settlements and the impact of geopolitical factors.
Comments