The Growing Influence of Crypto and CBDCs on Financial Stability

A survey by the Bank for International Settlements (BIS) has found that the number of central banks planning to launch central bank digital currencies (CBDCs) has doubled since last year, with almost a quarter of all central banks globally currently piloting a retail CBDC. However, the BIS also warned that if widely used for payments, cryptoassets including stablecoins could pose a threat to financial stability. To address these risks, regulatory bodies have published updated guidance and standards for stablecoins and crypto activities. By 2030, it is expected that 15 consumer-facing retail CBDCs and nine wholesale CBDCs will be launched worldwide. While 93% of central banks are investigating CBDCs, some have indicated that they do not intend to issue a digital currency in the near future. The United States has not yet determined whether it will pursue a CBDC.