A new report published on Jan. 8 by the Bank for International Settlements (BIS) has found that seventy percent of central banks worldwide are conducting research into central bank digital currency (CBDC) issuance. However, concrete plans for implementation and motivations vary considerably across contexts.

The BIS is an organization based in Switzerland made up of 60 of the world’s central banks, and has to date devoted a number of major reports to both decentralized cryptocurrencies and CBDCs. The latter are distinct from the former in that they are digital currencies issued by a central bank, whose legal tender status depends on government regulation or law.

As the BIS outlines, CBDCs are classed as either “wholesale” — i.e. restricted-access digital tokens for wholesale settlements such as interbank payments and securities settlements — or “retail.”

The latter category is further subdivided by BIS into “general purpose” and “account-based” — i.e. those extensively available and aimed at retail transactions — or “general purpose” and “token- or value-based.” These are a form of central bank-issued digital cash available for the general public, which has similar availability to an account-based retail CBDC, but is distributed and transferred in a different way.

The BIS’ survey studied 63 central banks worldwide, 41 of which are based in emerging market economies (EMEs), and 22 of which are in advanced economies — together representing almost 80% of the world’s population and more than 90% of its economic output. Of these, 70 percent were found to be already engaged — or soon to be — in theoretical CBDC research, a slight increase over 2017.

Among banks engaged in CBDC research, around half have reportedly moved to experiments and hands-on proof-of-concept work — a 15 percent increase over 2017 — although many of these PoCs are notably analytical in nature and do not indicate concrete CBDC issuance plans. Only five central banks have actually progressed to running CBDC pilot projects.

The BIS’ report isolates Sweden and Uruguay as two exceptional jurisdictions in which active consideration of issuing a general purpose CBDC as a complement to cash is at an advanced stage.

In Sweden’s case, the country’s Riksbank has been working on an e-Krona project as of early 2017. Sweden is reportedly now ahead of its next stage, which is a pilot for a prepaid value, non-interest bearing and traceable e-Krona.

In the case of Uruguay, the country’s central bank has reportedly already completed a pilot program for a general purpose CBDC. With cash in circulation on the decline, the central bank launched an e-Peso pilot programme in Nov. 2017, which was notably DLT-based. Since the pilot’s reportedly successful conclusion in April 2018, the bank is now evaluating further trials and potential issuance.

Last November, International Monetary Fund (IMF) head Christine Lagarde urged the international community to consider CBDCs, arguing they could work towards public policy goals like financial inclusion, security and consumer protection and privacy in payments.