A Central Bank Digital Currency is a country’s official currency, presented in a digital form. It operates on a blockchain network and is issued and backed by the central bank of the respective country. CBDCs exist only in digital form and can be stored using compatible electronic devices, unlike physical and paper-based cash.

Unlike cryptocurrencies, they’re issued by centralized authorities and can be used as legal tenders. Since they’re centralized, individuals may need to reveal their identities to own and transfer them. If CBDCs go mainstream, they can dominate the world of digital payments. However, CBDC payments cannot be as anonymous as crypto payments.

Central Bank Digital Currency Launches So Far

The first CBDC launch happened in 2020, which was DCash by The Central Bank of The Bahama. Other CBDC launches are DCash by the Eastern Caribbean Central Bank, e-Naira by the Central Bank of Nigeria, and JamDex by the Bank of Jamaica. There are a total of four central banks that have completely tested and launched their digital currencies covering a total of 11 countries including 8 countries from the Caribbean Islands.

130 countries in the world are currently exploring central bank digital currencies. Out of those countries, 11 have successfully launched their currencies and 127 are still working. 19 of the G20 nations are in the advanced stage of developing CBDCs, having 9 nations already reached the pilot stage.

What is the Pilot Stage?

The pilot stage of a central bank digital currency refers to the initial stage of testing and implementation before a public rollout. CBDCs are launched in a controlled environment (i.e. limited region, limited users, and specific use cases) with restricted functionality.

Developers and authorities collect feedback from users during the pilot stage having some measurement points such as ease of use, accessibility, technical performance, economic impact, and overall satisfaction. Authorities note this feedback and make necessary improvements in the pilot stage itself before performing the public rollout.

Central banks from 21 out of all 130 (and 9 out of the G20) nations are collecting feedback for their digital currencies, which indicates that we can expect a healthy number of CBDC launches this year.

Potential CBDC Launches in 2024

Well, we aren’t sure about these launches. But we can expect these pilot-stage countries to roll out their authorized digital currencies in 2024:

  1. Saudi Arabia: The Central Banks of Saudi Arabia started working on Project Aber in late 2019. The intended wholesale CBDC is based on Emirati Dirham and Saudi Riyal, which aims to simplify cross-border transactions. According to the most recent report in March 2023, the centralized authorities are focusing on testing a domestic retail-wholesale CBDC, a joint proof-of-concept on CBDC interoperability with India, and the intended soft launch of mBridge for a 12 to 15-month period. If everything goes right in the pilot stage, we can expect the launch of Saudi Arabia’s central bank digital currency, which is known as ‘Digital Dirham’ in Q2 2024. However, the United Arab Emirates is working on the same project (Project Aber), so we can expect the same launch date for that nation as well.
  2. India: In July 2021, the Reserve Bank of India announced a series of pilot studies for a phased rollout of a CBDC known as Digital Rupee. It’s surprising that the authorities were aware of CBDCs’ pros and cons back in February 2021. The concept note with features, risks, and features of the Digital Rupee project was launched in October 2022 by RBI as promised by the Finance Minister of India. The progressive run of the project kept going with the wholesale CBDC pilot program in partnership with 9 national banks in November 2023. India’s market giant Reliance Retail started accepting Digital Rupee as payments under the retail program in December 2022. RBI aimed to scale the user base to one million users by 2023, which hasn’t happened yet. But we expect that the Digital Rupee is doing well in its pilot stage and may achieve this mark after being launched officially in 2024.
  3. Australia: The Reserve Bank of Australia announced a partnership with two other banks and two software companies to explore a distributed ledger technology (DLT) based CBDC. RBA released a white paper in September 2022, which intended to test two use cases in November 2022 and run a pilot between January 2023 to April 2023. Australia and New Zealand Banking Group announced the completion of the pilot project in April 2023 operated by RBA. Now two new use cases (offline payments and pension funds) are being tested and we can expect the launch of Australia’s eAUD soon if the testing is finished this year.

These are the major countries expected to launch their CBDCs this year. Russia aimed to launch Digital Ruble by 2024, but somehow, it got delayed and it may launch in 2025. China, South Africa, Sweden, and Japan are some other countries that may launch their Central Bank Digital Currencies by the end of 2024.

[Also read: 10 Interesting Facts About Crypto Payments in 2024]

Coinremitter’s Perspective on CBDCs

The year 2024 may bring some noteworthy changes to the world of digital currencies. CBDCs may take their place in the digital payment system as they’ll be backed by the government. Some individuals may get attracted to them due to negligible risks of volatility. Since cryptocurrencies are intangible assets. Their values are expected to spread out over time. So one may not look at them for making short or long-term investments.

However, the key purpose for introducing them is to simplify cross-border transactions and they’re expected to do that almost perfectly. As they’re centralized, involved parties may need to reveal their identities for making CBDC payments, which is not always the case with crypto payments. The launch of CBDCs is definitely going to revolutionize digital payments, but privacy-focused individuals may still choose crypto payments over CBDCs.