Central banks around the world are continuing to develop central bank digital currencies (CBDCs). According to the Bank for International Settlements, 94% of central banks are actively working on CBDCs, with 19 of the G20 countries in advanced stages of development.

However, recent government decisions indicate a shift in sentiment. On September 23, Canada announced a shift in focus from retail CBDCs to “broader payments.” Australia has also shifted its focus to a wholesale CBDC.

These decisions have significant implications for the Web3 ecosystem, particularly around interoperability. CBDCs must be compatible with foreign CBDCs and legacy systems, which poses significant technical and regulatory challenges.

CBDCs could be a solution to the interoperability issues facing Web3, but many countries’ failure to pursue development could fragment the ecosystem. Countries that continue to pursue developments could set standards for interoperability, giving them an advantage on the global stage.