Raoul Herborg, managing director of central bank digital currency (CBDC) solutions at Giesecke and Devrient (G+D), recently discussed the findings from their survey on global CBDC progress. The report, produced in collaboration with OMFIF, gathered insights from 34 central banks, including the Bank of Ghana, Bank of Thailand, and the European Central Bank, along with interviews from key representatives about CBDC integration into the banking system.
Herborg explained that G+D is actively working on several pilot projects aimed at launching retail CBDCs. He emphasized that these digital currencies could bring the advantages of cash into the digital domain, functioning as a public payment method without transaction fees and independent of commercial banks. This makes them comparable to platforms like PayPal, Visa, and Mastercard, thereby enhancing accessibility and inclusivity. He remarked, “It’s about transferring the capabilities of cash into the digital world.”
Importantly, Herborg noted that CBDCs are designed to complement, not replace, existing commercial payment systems. Commercial banks are integral to this evolution, collaborating with central banks to foster new service development.
The survey indicated that 48% of global central banks anticipate launching a CBDC within the next three to five years, with 50% working on them to maintain monetary sovereignty. Key drivers for CBDC implementation include financial inclusion, offline payment capabilities, and the preservation of central bank roles, with regional motivations varying—Europe focusing on sovereignty and African nations prioritizing financial inclusion. Herborg pointed out that while mobile money providers are growing in Africa, many impose high transaction and onboarding fees.
He cited successful pilot projects from the Bank of Ghana and the Bank of Thailand. In Ghana, G+D initiated a pilot in a rural area providing cards to individuals without smartphones. Initial reluctance gave way to increased adoption, with the Bank of Ghana reporting a 60% rise in usage. He noted, “For those villagers, it was their first experience with digital payments, proving the technology’s potential for financial inclusion in rural settings.”
For the Bank of Thailand’s pilot, there was a clear need for offline payment solutions. The survey revealed a significant improvement in user satisfaction with offline functionality, rising from 0% in early 2023 to 20%. These solutions were seamlessly integrated into existing commercial banking technologies, exemplified by Siam Bank.
Challenges such as political approval, regulatory alignment, and cybersecurity threats remain obstacles to CBDC adoption. Herborg commented on the sovereignty concern in Europe, stating that reliance on non-European payment systems poses risks, especially in the current political climate.
Further, he elaborated on the digital euro initiative, highlighting the political complexities surrounding its development. As decisions are tied to both technological usability and regulatory approval, the path forward requires careful navigation.
Herborg remains optimistic about the future of CBDCs, envisioning their potential to transform the digital payment landscape significantly.