According to a new report by Juniper Research, payments made through central bank digital currencies (CBDCs) are expected to reach $213 billion per year by 2030. This represents a radical growth of over 260,000%, as the sector is currently limited to pilot projects, with only $100 million expected to be transacted by 2023.
The study suggests that CBDC adoption will be driven by governments looking to boost financial inclusion and control digital payments. As a result, CBDCs are expected to improve access to digital payments, particularly in emerging economies where mobile penetration is higher than banking penetration.
The report found that 92% of the total value transacted via CBDCs by 2030 will be paid domestically, reflecting a change from almost 100% during current pilot stages in 2023. Initially, CBDCs will primarily focus on addressing domestic payment challenges due to their issuance by central banks, while cross-border payments are expected to follow subsequently, as systems become established and links made between CBDCs used by individual countries. The report author, Nick Maynard, explained that while cross-border payments currently have high costs and slow transaction speeds, this area is not the focus of CBDC development.
Juniper Research also noted that the absence of commercial product development for CBDCs is a primary constraint for the current market, adding that there are few well-defined platforms for central banks to utilize. As CBDC adoption will be country-specific, cross-border payment networks will need to link schemes together to allow the wider payments industry to benefit from CBDCs. The Atlantic Council’s central bank digital currency tracker shows that 114 countries, representing over 95% of global GDP, are currently exploring a CBDC, with 11 countries having fully launched a digital currency.
