Initial enthusiasm for central bank digital currencies (CBDCs) is rapidly waning, according to a recent report from OMFIF’s Digital Currency Institute (DMI).

An annual survey revealed that only 13% of central bankers consider CBDCs a promising solution for cross-border payments, a notable decline from 31% last year. Furthermore, only 10% are still developing the concept, compared to 21% in 2022.

Challenges in the development of CBDCs

Regulatory and technological challenges have generated skepticism among central bankers themselves. Some notable factors include:

Fragmentation in international projects

mBridge : Led by the People's Bank of China, it seeks to offer alternatives to the dollar in emerging economies.

Agorá : Backed by the Bank for International Settlements (BIS), it has a more Western focus but lacks a broad base of support.

Complex governance

Implementing a multicurrency system would require the creation of a supervisory structure similar to the Basel Committee on Banking Supervision, but with greater scope.

Limited adoption

Only a small fraction of financial institutions are ready to transition to systems like Swift’s new messaging format, which is scheduled for adoption in November 2025.

Why are they losing support?

One of the main goals of CBDCs is to counter the dominance of tech giants like Google, Meta and Alibaba in digital payments. However, the development of these currencies has faced problems such as the possible loss of monetary autonomy and the lack of consensus on regulatory standards.

Furthermore, emerging economies, which would benefit significantly from an improved cross-border payments system, face additional barriers due to lack of infrastructure and vested interests in existing systems.

More promising alternatives

Nearly half of the bankers surveyed see improvements in instant payment systems as a more viable option. These solutions, while less disruptive than CBDCs, could modernize international transactions without the challenges associated with digital currencies.

Final reflection

The future of CBDCs appears uncertain. While projects like mBridge and Agorá attempt to gain traction, slow progress and regulatory divides cast doubt on their viability. As optimism wanes, the focus appears to be shifting towards improving existing infrastructures as a more practical and achievable solution.

Will it be possible to unify global economies with a system based on CBDCs or will traditional models adapted to new needs prevail?