A research report published by International Monetary Fund (IMF) staff has shown that most central banks around the globe are exploring the possibility of issuing digital currencies.
According to the researchers, figures from the Bank for International Settlements (BIS) indicated that up to 93 percent of monetary authorities worldwide were considering adopting central bank digital currencies (CBDCs), with over 100 countries exploring the possibility of issuing CBDCs for retail use.
IMF staff suggested that CBDCs could play a role in global de-dollarization and countering the trend of "cryptoization."
"In dollarized or euroized economies, the introduction of a CBDC could encourage a greater use of the local currency by making it a more attractive means of payment," they wrote in the report.
"In particular, with the rise of other forms of digital money denominated in foreign currency (such as stablecoins), a CBDC can help prevent the local currency from being supplanted."
The report noted that CBDCs' influence would vary depending on how well the instrument addresses financial inclusion barriers in a particular country.
CNBC implementation
CNBC has already been introduced in numerous countries. For instance, China has rolled out the digital yuan, while Russia has conducted trials for a comparable version of the ruble.
Russia's push for the digital ruble gained momentum as legislation for this digital currency received approval in the upper house of parliament to revitalize its economy.
In July, Bloomberg reported the pilot scheme for Russia's digital ruble, which commenced on August 15.
The pilot program involves 13 banks. It allows a select group of clients to open digital wallets, allowing them to send and receive digital ruble payments. They can use Russia's Faster Payments Service for transactions at 30 retail establishments in 11 cities nationwide.
First deputy governor of the Bank of Russia Olga Skorobogatova mentioned at a press conference in August that the bank had prepared to start actual transactions for a considerable period.
"This pilot will involve, in the first instance, testing of such active transactions as the opening of wallets in digital rubles for banks, clients (individuals and legal entities), transfers of digital rubles between clients and payments in trade and service businesses," said Skorobogatova.
China and Russia also lead efforts on a global scale to diminish dependence on the U.S. dollar in cross-border trade and investments. The BRICS bloc, comprising Brazil, India, South Africa and the aforementioned two, has been considering the potential for a shared currency arrangement.
This idea was proposed by Brazilian President Luiz Inacio Lula da Silva during a BRICS summit in Johannesburg. He insisted that a shared currency for trade and investment could mitigate their susceptibility to fluctuations in the dollar exchange rate.
In response, South African officials commented that a BRICS currency was not part of the summit's agenda. In July, India's foreign minister also emphasized that there was no plan for a BRICS currency. BRICS' discussions revolved around boosting trade using national currencies, as indicated by India's foreign secretary before the summit.
In a video address at the summit, Russian President Vladimir Putin described de-dollarization as an "irreversible process." While some experts view these efforts as a significant challenge to the global dominance of the U.S. dollar, others consider it a temporary phenomenon.