Global CBDC Push Gains Momentum Amid Adoption Challenges

Central banks worldwide are accelerating efforts to develop and deploy central bank digital currencies (CBDCs), with numerous countries moving beyond research into active pilots and public rollouts. Despite the surge in interest and technological progress, widespread day-to-day adoption by the general public remains modest, revealing ongoing hurdles in trust, usability, and infrastructure.

CBDCs promise distinct advantages, including streamlined implementation of monetary policies and automation of processes like tax collection and foreign investment regulation. They also reduce costs associated with printing and handling physical cash. India, a leader in digital payments thanks to its Unified Payments Interface (UPI), exemplifies early success in this space. Since launching its Digital Rupee pilot in December 2022, India has onboarded over 1.3 million users and 300,000 merchants by early 2024. The pilot’s token-based offline model integrates seamlessly with existing systems like UPI and Aadhaar, underscoring the role of strong digital infrastructure and public-private cooperation.

Aishwary Gupta, Global Head of Payments at Polygon Labs, highlighted in a recent interview that while over 130 countries—accounting for 98% of global GDP—are exploring CBDCs, adoption rates vary significantly. China’s e-CNY, with more than 260 million wallets and over $250 billion processed, still experiences limited daily usage. Nigeria’s eNaira faces challenges tied to trust and utility gaps. Gupta emphasized that for CBDCs to succeed, they must tackle real-world issues such as financial inclusion and remittance services while safeguarding user privacy.

The debate surrounding CBDCs extends beyond technology to concerns over control versus privacy. Although central banks assert that digital currencies are designed to complement, not replace, cash, critics worry about increasing government oversight in monetary transactions. As tokenization and decentralized finance advance, questions about surveillance, financial freedom, and the role of central authorities in a digital economy are intensifying.

While the global CBDC experiment remains in its infancy, discussions about trust, transparency, and the future balance between innovation and privacy are shaping how digital money will evolve in the years ahead.