What is the state of central bank digital currencies?

The short answer

A central bank digital currency is a digital form of central bank money issued directly by the monetary authority, rather than indirectly through commercial bank deposits. CBDCs come in two main flavors: retail (used by households and merchants) and wholesale (used by banks and major financial institutions for settlement).

Retail CBDC was the dominant policy frame from 2019 to 2023. Concerns about declining cash use, financial inclusion and competition from private stablecoins drove most central banks into research mode. By 2025, the picture had shifted. The US under the Trump administration explicitly halted retail CBDC work in January 2025. The ECB advanced a digital euro project but only with strong privacy and intermediation guarantees.

The active frontier is now wholesale CBDC and cross-border experimentation, where the political resistance is lower and the efficiency case is clearer.

→ New to monetary policy? Financial education hub

What the data shows

The Atlantic Council’s CBDC Tracker provides the most consolidated dataset on global CBDC status.

Key figures (Atlantic Council CBDC Tracker, BIS, central bank disclosures, mid-2025):

• Around 137 countries and currency unions, representing approximately 98 percent of global GDP, were exploring CBDCs in mid-2025, up from 35 in May 2020
• Approximately 49 countries had active CBDC pilots, with 11 having fully launched
• China’s e-CNY pilot reached cumulative transaction volume of about 7 trillion yuan (approximately 986 billion dollars) by mid-2024, with around 225 million digital wallets and presence in 17 provinces
• India’s e-rupee circulation reached approximately 10.16 billion rupees (around 122 million dollars) by March 2025, up about 334 percent year-over-year
• The US Executive Order 14178, issued January 23, 2025, prohibited federal agencies from any action to establish or promote a US retail CBDC
• The European Central Bank entered a multi-year preparation phase for the digital euro, with a potential issuance decision targeted around 2026

The exception that nuances the headline: the launches in the Bahamas, Jamaica and Nigeria have not produced sustained mass usage. Sand Dollar and eNaira adoption remained limited despite government promotion.

→ Dataset: Financial conditions index

Why it happens — the macro mechanism

The CBDC debate operates through three distinct channels.

Channel 1 — The retail design dilemma. A retail CBDC would let households hold central bank money directly. The benefit is direct access to a riskless settlement asset. The cost is potential disintermediation of commercial banks: in stress, depositors could shift en masse from bank deposits to CBDC, accelerating bank runs. Most retail CBDC designs respond by capping individual holdings, paying no interest, or routing distribution through banks — features that erode the original differentiation from regular electronic payments.

Channel 2 — The wholesale efficiency case. The most underdiscussed reality is that wholesale CBDC, used only between financial institutions, raises few of the disintermediation concerns and offers measurable settlement efficiency. Project Agorá (BIS, 2024), Project Helvetia III (Swiss National Bank), and similar initiatives focus exclusively on this layer. The political tractability is much higher because consumers do not interact with these systems directly.

Channel 3 — Geopolitical fragmentation. The third underdiscussed driver is that CBDC choices have international implications. China’s e-CNY can support cross-border settlement that bypasses dollar-clearing infrastructure. The 2024 reorganization of mBridge, with the BIS withdrawing as direct operator while bilateral participants continued, illustrated how CBDC infrastructure can become entangled in sanctions regimes. The US 2025 retreat from retail CBDC may protect dollar primacy by avoiding a less-trusted alternative; it may also cede infrastructure leadership.

Synthesis by regime: in the 2019-2022 phase of declining cash use and stablecoin proliferation, retail CBDC research advanced everywhere; in the 2023-2024 transition, with banking stress (SVB) and growing concerns about disintermediation, retail enthusiasm moderated and design constraints multiplied; the post-2024 regime, with the US explicitly opting out and the ECB committing only to intermediated digital euro, marks the emergence of a divided global landscape.

Retail CBDC was the answer to a question advanced economies decided not to ask; wholesale CBDC remains the answer to questions central banks still want to settle.

→ Framework: Financial innovation and systemic risk

What it means for different economic actors

Households in advanced economies are unlikely to use a retail CBDC in the near horizon. The exception is the Eurozone, where the digital euro project continues and could deliver a payment instrument by the late 2020s, though with substantial intermediation by banks.

Commercial banks face an asymmetric outcome. They have lobbied successfully against features that would make retail CBDC competitive with deposits. They are simultaneously participating in wholesale CBDC pilots that promise capital efficiency on their interbank settlement.

Stablecoin issuers operate in a complementary rather than substitutive relationship to wholesale CBDC. The MiCA framework in Europe and the GENIUS Act trajectory in the US frame stablecoins as private-sector adjacents rather than CBDC competitors.

A common error is treating CBDC as monolithic. The 137-jurisdiction headline obscures vast differences in design, ambition and actual deployment.

Practical observation

Go deeper

Related questions

• What is tokenization and will it reshape markets?
• How does blockchain affect financial infrastructure?
• Why is the dollar still the world’s reserve currency?
• How do open banking regulations work?

Frequently asked questions

What is the difference between a CBDC and a stablecoin?

A CBDC is a direct liability of the central bank, equivalent to physical cash but in digital form. A stablecoin is a private-sector token that aims to maintain a stable peg, typically to a fiat currency, by holding reserve assets. Stablecoins carry the credit risk of their issuer and reserve composition; CBDCs carry only the credit risk of the central bank, which is generally negligible in advanced economies. Some jurisdictions (the EU under MiCA) explicitly recognize regulated stablecoins as a complement to potential CBDC, not a substitute.

Why did the United States halt retail CBDC work in 2025?

The January 2025 executive order cited concerns about privacy, civil liberties and the potential for government surveillance through transaction-level data. Critics of CBDC had also raised disintermediation risks for commercial banks and questioned whether retail CBDC offered material benefit beyond existing private-sector payment innovations. The order does not preclude wholesale CBDC research, which continues in narrower form.

How is China’s e-CNY actually used?

e-CNY is integrated into existing Chinese payment apps, public transit and government services. Cumulative transaction volume reached around 7 trillion yuan by mid-2024, but most analysts attribute much of this to government promotion programs rather than spontaneous demand. WeChat Pay and Alipay still dominate retail digital payments in China; e-CNY operates as a complementary rail rather than a replacement, with the longer-term ambition tied to potential cross-border use cases.

Last updated — 30 July 2026