Where Central Bank Digital Currencies Actually Stand, and Why So Few Have Launched

A few years ago, central bank digital currencies looked like the next inevitable step in the evolution of money. Facebook's Libra project in 2019 had frightened policymakers into action, China was racing ahead with pilots, and central banks around the world announced research programs. Trackers maintained by think tanks now count well over a hundred countries that have explored a CBDC in some form. Yet the number of fully launched retail digital currencies remains tiny, and several of those have seen disappointing uptake. As a new year begins, with a US administration arriving that has promised to block a digital dollar, it is a good moment to take stock of what has actually happened and why the revolution has been slower than advertised.

What a CBDC is, and what it is not

A central bank digital currency is a digital form of money issued directly by a central bank. Most people already use digital money every day, but it is almost always a claim on a commercial bank: a deposit. The only form of central bank money available to the public today is cash. A retail CBDC would give households and businesses a digital equivalent of banknotes, a direct claim on the central bank, usually distributed through banks and payment providers. A wholesale CBDC, by contrast, would be used only by financial institutions to settle large transactions, a modernization of reserves that banks already hold at central banks.

The motivations vary. Some central banks want to preserve public money as cash use declines. Others want cheaper payments, better financial inclusion or a domestic alternative to large technology platforms and foreign stablecoins. A few, most visibly China, see strategic value in a state-controlled digital payment infrastructure.

The live experiments

The pattern is consistent. Where existing digital payments already work well, a CBDC offers ordinary users little that they do not already have. In China, mobile wallets run by large technology companies dominate everyday payments, and the e-CNY has had to fight for attention despite state backing. In Nigeria, the eNaira struggled because many people lacked smartphones or bank accounts, and those who had them saw no clear reason to switch. The Eastern Caribbean's DCash pilot faced technical outages and was eventually wound down.

The big economies: slow and cautious

In the large advanced economies, CBDC work has been deliberate. The European Central Bank began a preparation phase for a digital euro in late 2023, while the European Commission's legislative proposal for it is being debated by the Parliament and member states. The Bank of England and the UK Treasury have been in a design phase for a potential digital pound, stressing that no decision to launch has been made. Japan has run experiments without committing to issuance.

The United States has moved least. The Federal Reserve has published research and repeatedly said it would not issue a CBDC without authorization from Congress. That authorization looks unlikely. The House of Representatives passed a bill in 2024 that would bar the Fed from issuing a retail CBDC, and the incoming president campaigned on a pledge never to allow one. For the time being, the world's most important currency is absent from the retail CBDC race.

The hard part of digital money was never the technology. It was persuading people to use something they did not ask for.

Why the hesitation?

• Privacy: public concern that a central bank could see or control individual payments has become a powerful political issue.
• Bank disintermediation: if households moved deposits into CBDC, banks could lose funding, especially in a crisis.
• Weak demand: in countries with efficient card and instant payment systems, the consumer case is thin.
• Cost and complexity: building a resilient national payment system is expensive and technically demanding.

Instant payment systems have also stolen some of the CBDC thunder. India's Unified Payments Interface and Brazil's Pix have shown that public infrastructure can transform everyday payments without a new form of money. They allow near-instant transfers between bank accounts at very low cost, and they are extremely popular. For many policymakers, they offer most of the benefits promised by a retail CBDC with fewer of the risks.

The wholesale track

Wholesale CBDC projects have attracted less public attention but arguably more institutional momentum. The Bank for International Settlements has coordinated experiments in cross-border settlement, most prominently mBridge, a platform for multiple central banks' digital currencies. In late 2024, the BIS stepped back from mBridge, saying the project had reached a mature stage; the move was widely read in the context of Western concerns that such platforms could be used to route around sanctions. Other initiatives, focused on tokenizing commercial bank deposits alongside central bank money, continue.

Money has not ended, yet

The CBDC story so far is one of ambition meeting reality. Technically, digital central bank money is feasible. Politically and economically, it faces hard questions about privacy, banking stability and what problem it solves for ordinary people. The coming year will be shaped by divergence: a United States moving firmly away, Europe continuing methodical preparation, and China pressing ahead. For anyone wondering whether the end of money as we know it is near, the honest answer is that it is arriving more slowly, and in more varied forms, than the early enthusiasm suggested. This article is analysis, not investment advice.