Countries With CBDCs, Or At Least Testing

The needs of smaller countries with CBDCs can be different to those of larger nations where prominent finance stakeholders may be more change resistant
Countries With CBDCs, Or At Least Testing - Crowdsourcing Week

Written by Clive Reffell

The issues associated with central bank digital currencies, for good or for worse, are far from a universal one-size-fits all. Different central banks, and their national governments, have a range of different priorities of what they want CBDCs to resolve. The needs of smaller countries with CBDCs, and the leeway to disrupt current financial protocols, can be different to those of larger nations where prominent stakeholders in the financial system may be more change resistant. This article takes a snapshot look at what is happening in CBDCs around the world.

We are also very well aware that many people do not welcome CBDCs, and regard them as instruments of growing centralization, invasive government control and a threat to privacy. This has been covered in an article on our BOLD Awards platform, so we won’t re-run those opinions here.

105 countries, representing over 95% of global GDP, are exploring a CBDC. 10 countries have fully launched a digital currency, with China’s pilot set to cover 23 cities. Three countries with CBDCs are in the Caribbean, so let’s begin there.

CBDCs in the Caribbean

According to the Atlantic Council CBDC tracker, three CBDCs have been launched in the Caribbean region: the Bahamas’ Sand Dollar; Jamaica’s Jam-Dex; and the Eastern Caribbean Central Bank DCash in seven of its eight member states. 

The Caribbean has a number of low population countries, and many are islands. This allows for cleaner self-contained pilots to safely test new ideas such as a digital currency. Although there is a high use of cash throughout the region, it can be difficult and relatively expensive for the general public to access any, particularly in the more remote regions. Traditional retail banks cannot afford to be omnipresent among thinly spread populations. There could also be a political desire to resist “dollarization” and become less reliant on the US dollar as a secondary currency in everyday use.

Additionally, recent natural disasters attributed to climate change exposed the risks of clinging to traditional currency systems. The Bahamas, a small chain of islands with under 400,000 people, became the first country in the world to officially launch a central bank digital currency, the Sand Dollar, in 2020. It was about one year after Hurricane Dorian had hit the Bahamas in September 2019, which left the islands of Grand Bahama and Abaco without banking services for weeks. We’re regularly told the likelihood of more disasters of a similar nature is increasing.

Despite these practical considerations, it is not yet clear if countries with CBDCs in the Caribbean can be called a success. The Bahamian Sand Dollar had only about $300,000 worth of electronic currency in circulation and just 30,000 digital wallets existed in July 2022 – a number that represents 7.5% of the population. After launching in April 2021, the Eastern Caribbean Central Bank’s DCash crashed in January 2022 and was down for two months. Nonetheless, development of CBDCs aims to resolve existing deficiencies in the banking system and threats to infrastructure, rather than try to transform an already working system to meet new aims.

Nigeria, an African test case

On a very different scale, Nigeria is Africa’s largest country by population and size of economy. When considering countries with CBDCs that are going to be successful, Nigeria’s high take up of Bitcoin was seen as a good sign: it ranks 11th among all countries. The launch of its CBDC, the eNaira, in October 2021 was watched with interest by banking officials and political leaders around the world.

Countries With CBDCs, Or At Least Testing - Crowdsourcing WeekHowever, Bitcoin’s popularity in Nigeria is largely for reasons including its ability to bypass the government’s capital controls, which restrict the use of foreign currencies and sending and receiving money from abroad. Bitcoin is also relatively more popular in other countries with similar policies. Nigeria’s six devaluations of its fiat currency in recent years also boosted the adoption of Bitcoin, which remains outside the control of any national government. While it can lose purchasing power for other reasons, it is totally resistant to inflation within any particular country and it is not subject to any government control.

The eNaira was nothing like as popular as Bitcoin, and in 12 months take up was just 0.05%. Only 1 in 200 Nigerians used it, despite there being 60% of people without a bank account. The government had even offered discounts and other incentives to increase adoption, and the Central Bank of Nigeria also barred commercial banks from doing business with crypto exchanges.

Yet in July 2022, after the launch had stalled, the Governor of the Central Bank of Nigeria blamed the banks for restricting use of the country’s digital currency on account of not wanting to lose revenue from conventional banking: the eNaira does not attract charges like normal deposits and withdrawals.

Without popular public traction, and lacking both key benefits of Bitcoin and support from the retail banking system, eNaira has flopped. “The eNaira failed because it wasn’t a real digital currency,” said the head of Fast Forward, a Nigerian innovation and startup funding hub. “Not programmable, not decentralized post-minting, no exchanges. It was another version of cashless Naira at best, a branding exercise.” In short, Nigeria’s CBDC failed to solve the problems that Bitcoin does.

Having established that CBDCs face different opportunities and challenges in different countries, here are some other global examples where there have been recent updates. Several are restricted to initial phases in the wholesale banking sector. 

European Union

The European Central Bank has to consider issues within all of its 27 member states, and some have the Euro as their currency and some do not. With previous good progress in exploring the potential benefits and risks of Countries With CBDCs, Or At Least Testing - Crowdsourcing Weeka CBDC, efforts are now shifting to a solid design of the digital euro and the creation of a legal framework. It must allow for 43% of respondents in a public consultation who ranked privacy as the most important feature of an upcoming digital euro, as well as anti-money laundering rules and a need to limit the use of the digital euro for investment.

The ECB is working from September to the end of 2022 with five companies, selected from 54 that applied to be involved, to simulate transactions processed by front-end prototypes developed by the firms involved, and processed through the Eurosystem’s interface and back-end infrastructure. The five companies are: online retailer Amazon; Spanish financial institution CaixaBank; French payment service provider Worldline; the ECB’s own European Payments Initiative (EPI); and the Italian paytech company Nexi.

Countries With CBDCs, Or At Least Testing - Crowdsourcing Week



Countries With CBDCs, Or At Least Testing - Crowdsourcing WeekThe RBI (Reserve Bank of India) launched its first digital rupee pilot project in the wholesale banking sector on 1 November 2022, focused on settlement of secondary market transactions in government securities. Multiple technologies will be tested, including a hybrid CBDC with some layers added to the bank’s centralized system and others to the distributed ledger networks (blockchain). Nine banks are taking part in the pilot.

The RBI’s eventual aim, it says, is to upgrade financial inclusion rather than replace the current form of money. Out of the population of 1.4 billion, 20% do not have a bank account.

In the meantime, to help clear the way back in July 2022, India’s minister of finance said “RBI is of the view that cryptocurrencies should be prohibited.”


On 3 November 2022, the Monetary Authority of Singapore launched an expanded collaboration with international partners on cross-border foreign exchange settlement using a wholesale CBDC.

They want to investigate the possible extent of improved efficiencies and reduced settlement risks through smart contracts; consider both blockchain-based and centralized infrastructures; and establish policy guidelines.

MAS will be working with Banque de France, Swiss National Bank, and the Bank for International Settlements Innovation Hub’s Eurosystem, Switzerland and Singapore Centres.  Mr Sopnendu Mohanty, Chief FinTech Officer, MAS, said “Working with competent, like-minded partners will accelerate central banks’ collective progress to an optimal future state of digital infrastructures.”


As a non-member of the European Union, Norway has been developing its own CBDC since 2016, and has reached a testing phase. The prototype infrastructure is based on Ethereum technology.

Cross-border collaboration is very much a necessity for countries with CBDCs to test cross-border payment matters. On September 28, Norway, Sweden and Israel’s central banks announced they were joining forces with the Bank of International Settlements (BIS) to explore CBDCs.

Torbjørn Hægeland, Executive Director for Financial Stability at Norway’s central bank, Norges Bank, was reported as saying the current experimental trial and will continue until June 2023, and will “form the basis for our recommendation on how we should then go forward into an eventual next phase.”

However, a significant number of Norwegians are concerned that data on personal purchases will be matched with their digital ID and provided to government agency authorities. All supermarket transactions, for example, are already going to be monitored for “health reasons.” With a CBDC in place, monitoring all purchases could far more easily become an automated fact of life without requiring retailers to provide any data.


Turkey’s central bank announced in September 2021 that it was considering issuing a digital currency to complement its existing payments infrastructure, and that a “blockchain-based central bank digital currency will be put into practice.” With cooperation from the Ministry of Finance and Scientific and Technological Research Institution to integrate the digital currency with digital identity, the timetable is Turkey will launch its CBDC in 2023. 

US and UK

According to the Atlantic Council, the US and UK have the least developed CBDC programs of the G7 nations. It is widely accepted that in recent major voting events, significant proportions of both country’s populations were casting votes as a sign of rejecting the way they had begun to feel marginalized by decisions and developments that they felt excluded from, left behind. Trump won the US Presidency, the UK was obliged to leave the European Union after almost 50 years. We believe both governments now appear wary of stirring up too much similar sentiment about introducing a CBDC too swiftly, though both say they are committed to doing so. 

The UK is home to a fairly active crypto market. In the end that did not account for much in Nigeria, though the UK does not share the same policy on restricting movements of cash. In April 2022, the UK government announced its plan to make the country “a global crypto asset technology hub”. Its strategy will be based on stablecoins – a version of crypto linked to the fiat currency, and thus designed to maintain parity with a country’s tangible cash. The Bank of England has established a CBDC division to focus on development of what’s been called “Britcoin,” though several financial authorities are less keen. The founder of a platform which lets users make and receive electronic payments backed by physical gold has said: “This is the clearest indication yet that the Bank of England is looking to control or, better yet, crush the rise of alternative currencies.”

In March 2022, US President Biden issued an Executive Order titled “Ensuring Responsible Development of Digital Assets.” In November 2022, the US inter-bank payment systems operator The Clearing House responded with a 22 page reply, which included: “The risks associated with the possible issuance of a CBDC in the U.S. outweigh its potential benefits and, therefore, it should be determined that a CBDC is not in the national interest.” There’s going to be a lot of work to bring stakeholders together on this topic.

At the same time, unhindered by public opinion and in what could be seen as a global geopolitical extension of CBDC development, China will roll out use of its digital currency in more cities in 2023. Is it part of a long-term bid to topple the US dollar as the world’s reserve currency?


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About Author

About Author

Clive Reffell

Clive has worked with Crowdsourcing Week on sourcing and creating content since May 2016. With knowledge and experience gained in a 30+ year marketing career based in London, UK, he operates as an independent crowdfunding advisor helping SMEs and startups to run successful crowdfunding projects, and with wider social media and content marketing issues.

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