McKinsey Releases Report on Central Bank Digital Currency Developments

McKinsey recently released a report covering the basics of Central Bank Digital Currencies (CBDCs) including an update on countries currently utilizing the digital form of a government-issued currency. CBDCs are not pegged to a physical commodity but are state issued and operated. The report states there are a wide variety of approaches in various countries including DCash in the Eastern Caribbean, eNaira in Nigeria, and e-CNY in China. The report notes that “At present, 87 countries—representing more than 90 percent of global GDP—are exploring CBDCs.” McKinsey highlights several reasons for the recent spike in CBDC interest, including: Plummeting cash usage; Growing interest in privately issued digital assets; Decreasing sense of central banks as payments innovators; and, Rising global payment systems. The report states that providers of financial services infrastructure may want to consider operational upgrades to better incorporate CBDC usage.

Click here to read the McKinsey report on Central Bank Digital Currency developments.