CBDC Updates


Danmarks Nationalbank has issued a report on digital money including why people in developed nations want CBDCs.

In Denmark just over 10% of physical purchases are made using cash. The people who use and hold cash do so for a variety of reasons but a lack of trust in digital payments is not one of them. Danes have access to instant payments allowing quick and easy movement of money. The central bank also guarantees bank deposits up to a limit. Both of these help with trust in digital money.

Despite that, only 22% of payments use mobile payment tools such as Google Pay and Apple Pay. In a situation where a range of stablecoins fragmented payments, CBDCs might be seen a more secure, including compared to bank deposits.

Although the Nationalbank does not rule out a future CBDC, it does believe regulation might offer a better way of achieving the benefits often assigned to CBDCs. Some of its suggestions are: 

  • Support new technology and innovation – help develop standards, allowing tokenised bank money

  • Financial inclusion – every Danish citizen is already entitled to a bank account

  • Strengthen future competition –difficult to be sure CBDCs will reduce market failures

  • Reduce dependence on foreign payment systems – more independence might make CBDC less useful

  • Restrict use of private data – CBDC via intermediaries still leaks data; just legislate against it

  • Improve resiliency – but close interconnection between CBDC and bank deposits means breakdowns will still have impact Prevent currency substitution – limit by law.

Denmark’s position as a member of the European Union (EU) but not the Eurosystem creates a risk to Denmark’s monetary sovereignty if a digital euro is introduced. An unlimited ability for consumers and businesses to hold euros could affect the demand for Danish kroner with implications for banks’ business models, and increase the risk of systematic bank runs.


Taiwan has said that it has completed trials of its prototype retail CBDC in technical simulations. This was concluded three months early.

Electronic payments have risen from 40% in 2017 to 60% in the first quarter of 2022. The central bank started evaluating of a retail CBDC in September 2020 having completed a technical feasibility study using decentralised technology for a wholesale CBDC in June 2020. As part of this work it engaged with five commercial banks to develop a retail payment system. The central bank would like the CBDC to be based on a two tier model.

The Governor has said that it needs to establish how it will educate the public on the benefits of a CBDC, regulate it and put in place a sound legal framework before it takes the decision whether to proceed.


At the recent Qatar Economic Summit the Governor of the Qatar Central Bank said that the bank is at the stage of deciding on the best platform for issuing a CBDC.

This is happening in parallel to a review of the pros and cons of issuing a CBDC.


The People’s Bank of China (PBoC) ran trials of e-CNY deposits and withdrawals through special ATMs at a number of branches of the Industrial and Commercial Bank of China and Agricultural Bank of China in Beijing in June 2021. Patents have been filed on the process. PBoC sees this capability as helping the digital yuan become part of people’s daily life. It is now promoted in 23 Chinese cities.

The e-CNY is expected to reach large scale use this year, hence the need to start its commercialisation across payment infrastructure including ATMs, smartphones, wearable devices etc.

In June the first car insurance policy was sold in the e-CNY, the first freight tariffs have been paid in e-CNY and China Minsheng Banking Corp became the first commercial bank in the country to allow its corporate customers to pay wages in the e-CNY.


An IMF blog, ‘More Sub-Saharan African Central Banks Are Exploring Digital Currencies’, gives a quick overview of who is doing what in Africa on CBDCs and why. Nigeria has launched, South Africa and Ghana are running pilots and seven more are researching them.

The blog also lays out some of the big questions that need work.

BIS on Future Payments

The Bank for International Settlements (BIS) has issued a paper based on a chapter in its 2022 annual report outlining its vision of a future monetary system.

The paper outlines the shortcomings of cryptocurrencies and stablecoins and then suggests that trust in central banks, embodied in a CBDC, combined with faster payments, offers the best of the new technology and digital systems generally.

‘Recent advances in wholesale and retail central bank digital currencies (CBDCs) and retail fast payment systems could form the basis of an adaptable future monetary system that fosters private sector innovation, while enabling greater financial inclusion and user control over data’, it says.

ECB Assesses the Risks of Disintermediation

The European Central Bank (ECB) has published one of its occasional papers considering the risks of disintermediation should a retail CBDC be issued.

The paper explores a set of analytical exercises into the consequences of bank intermediation in the euro area. It makes assumptions about the degree of substitution between different forms of money in normal times and then uses several take-up scenarios to show how demand for a digital euro might develop.

It analyses the mechanisms available to commercial banks and the central bank to react to the introduction of a digital euro. The effects on bank intermediation are found to vary across credit institutions in normal times and to be potentially larger in stressed times.

If there were a digital euro, its capacity to alter system-wide bank run dynamics appears to depend on a few crucial factors, such as CBDC remuneration and usage limits.


The INX Digital Company, a broker-dealer, inter-dealer broker, and owner of a digital asset trading platform, and SICPA have signed a Memorandum of Understanding (MoU) to create a joint venture.

Under the terms of the MoU, INX will work with SICPA to establish a blockchain solution for CBDC and the supporting ecosystem to assist clients in bolstering monetary sovereignty and efficiently growing overall country GDP. The two companies plan to expand interoperability between different stakeholders across borders through this joint venture.