CBDCs and the future of money: A global shift towards sovereign digital currency
Central Bank Digital Currencies (CBDCs) have rapidly evolved from theoretical discussions into a tangible component of modern financial systems. Once confined to academic and policy circles, interest in CBDCs surged following the 2008 financial crisis and the emergence of cryptocurrencies like Bitcoin, which challenged conventional banking structures. A major catalyst came in 2019 with Facebook's announcement of the Libra project, prompting central banks to act swiftly to safeguard monetary sovereignty. Since then, CBDCs have emerged as a transformative innovation, with central banks across the globe embracing this evolution.
While each country's path towards CBDC adoption varies based on its financial infrastructure, technological maturity and policy objectives, the overarching goal remains clear: to create a more inclusive, efficient and resilient monetary system for the digital age.
For those new to the concept, understanding CBDCs begins with connecting it to familiar experiences. A CBDC is a digital form of a country's official currency, issued and regulated by its central bank. Unlike decentralised cryptocurrencies such as Bitcoin, CBDCs are government-backed digital fiat currencies, designed to serve as legal tender for everyday transactions. Think of it as digital cash: individuals could use it to buy groceries, pay for services, or send money instantly and securely just by using a smartphone.
Unlike balances in mobile wallets like e-Sewa or funds held in bank accounts, CBDCs carry the full backing of the government. For users, this translates into a more reliable and accessible payment method, particularly beneficial in underserved or remote areas. By merging the convenience of digital payments with the security of central bank backing, CBDCs aim to democratise access to financial services.
As the world becomes increasingly digitised with growing reliance on smartphones, online banking and mobile payments, central banks recognise the urgency of modernising money itself. The proliferation of digital wallets, cryptocurrencies and fintech platforms has reshaped public expectations around speed, security and accessibility in financial services.
In response, countries are actively exploring and launching CBDCs to ensure that their national currencies remain relevant and effective in a digital-first world. Today, more than 130 countries representing over 95 per cent of global GDP are researching, developing, or piloting CBDCs. From China's digital yuan to India's e₹, nations are not merely adapting to change but leading it, seeking to build more resilient, inclusive and future-ready monetary ecosystems.
Some countries have already taken significant steps. Nigeria, the Bahamas and Jamaica have fully launched their digital currencies. Meanwhile, the European Union and the United Kingdom are advancing their respective projects the digital euro and 'Britcoin'. Even the United States is conducting extensive research, though it has yet to formally commit to a national rollout. These efforts collectively underscore that CBDCs are not just a passing trend, but a cornerstone of the future financial architecture.
International cooperation is also gaining momentum. Initiatives such as 'mBridge', led by the Bank for International Settlements, involve countries like China, the UAE and Thailand in piloting cross-border CBDC transactions. These collaborative ventures demonstrate CBDCs' potential not only to enhance domestic monetary systems but also to improve global financial integration and efficiency.
Nepal, too, is embracing this digital transformation. The Nepal Rastra Bank (NRB) is actively working towards introducing a Central Bank Digital Currency, marking a significant step in modernising the nation's financial landscape. With technical support from the Bank for International Settlements, NRB has developed a CBDC prototype using the Hyperledger Fabric blockchain and completed a comprehensive feasibility study.
A pilot launch is targeted for 2026, with the system designed to support both wholesale and retail transactions. The goal is to enhance financial inclusion, reduce dependency on physical cash and improve the transparency and efficiency of payments. Legal frameworks are currently being prepared to ensure secure and regulated implementation. If successfully executed, Nepal's CBDC initiative could play a pivotal role in creating a more inclusive and digitally empowered economy, while keeping pace with global financial trends.
What's clear is that CBDCs are no longer just theoretical constructs, they are becoming a reality, shaping the next chapter of sovereign finance. However, the motivations behind CBDCs vary: advanced economies often focus on payment system modernisation and sovereignty over monetary policy, while developing nations see CBDCs as tools for expanding financial access, reducing cash dependency and boosting digital innovation. As more countries take concrete steps towards digital currencies, the global financial landscape is poised for a significant shift.
Despite the existing challenges such as cybersecurity, privacy and infrastructure, the promise of CBDCs remains compelling: a secure, efficient and accessible monetary system tailored for the digital age. The transition to CBDCs is not merely a financial evolution, it is a defining transformation in the future of money.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
2 hours ago
- Yahoo
2 Cryptocurrencies to Buy Now Before They Soar 140% and 580%, According to a Wall Street Analyst
Geoffrey Kendrick at Standard Chartered expects XRP to overtake Ethereum as the second most valuable cryptocurrency by 2028. David Puell at Ark Invest thinks Bitcoin can reach $710,000 by 2030 as more institutional investors and companies buy the cryptocurrency. Anyone uncomfortable with volatility should avoid cryptocurrencies, and investors should never anchor to Wall Street's price targets. 10 stocks we like better than XRP › XRP (CRYPTO: XRP) and Bitcoin (CRYPTO: BTC) advanced 565% and 410%, respectively, in the last three years. But certain Wall Street analysts expect the cryptocurrencies to climb even higher in the next few years: Geoffrey Kendrick at Standard Chartered says XRP will top Ethereum by 2028. At current prices, XRP must climb 140% to $5.10 to surpass Ethereum's market value of $302 billion. David Puell at Ark Invest expects Bitcoin to hit $710,000 by 2030. That implies about 580% upside from its current price of $104,000. Here's what investors should know about XRP and Bitcoin. The investment thesis for XRP centers on its ability to facilitate fast and cheap cross-border transactions. It is the native digital asset on the XRP Ledger, a blockchain created by fintech company Ripple to disrupt SWIFT (Society for Worldwide Interbank Financial Telecommunications), the system banks generally use to send money internationally. XRP transactions settle in seconds and cost a fraction of a cent, but SWIFT transactions may not settle for days and often incur larger fees. Yet, very few financial institutions have adopted XRP as a bridge currency to facilitate cross-border payments. I doubt that will change in the future, because cryptocurrency prices are volatile. Why send money as XRP when its price could plunge in a very short period? However, fast and inexpensive transactions mean that the XRP Ledger is also ideal for tokenized assets, a market that will hit $19 trillion by 2030, according to Ripple. Tokenized assets are real-world assets represented as digital tokens on a blockchain. For instance, Guggenheim Treasury Service recently tapped the XRP Ledger to issue digital commercial paper, a fixed-income security. Greater adoption of the XRP Ledger increases demand for the native cryptocurrency, XRP, which could make the token more valuable over time. However, I see a bigger catalyst in the pending approval of several spot XRP ETFs. Bitcoin has gained 125% since the approval of spot Bitcoin ETFs in 2024, and XRP could see similar price appreciation. The investment thesis for Bitcoin centers on its status as digital gold. Investors see the cryptocurrency as a hedge against inflation and the devaluation of fiat currencies like the U.S. dollar. In fact, the U.S. Dollar Index has declined 10% year to date, but Bitcoin has advanced 13%. That trend is likely to continue in the years ahead because, unlike fiat currencies, Bitcoin supply is limited. Importantly, institutional investors are increasingly comfortable owning Bitcoin. Forms 13F filed for the first quarter indicate that the number of large asset managers (with $100+ million in securities) with positions in the two most popular spot Bitcoin ETFs -- the iShares Bitcoin Trust and the Fidelity Wise Origin Bitcoin Fund -- more than tripled in the past year. Meanwhile, many companies are adding Bitcoin to their balance sheets. Strategy (formerly MicroStrategy) has essentially turned itself into a Bitcoin investment vehicle. It owns 582,000 BTC, purchased at an average price of $70,086, and it plans to invest another $56 billion through 2027. Other companies are following the same playbook, including Mara and Semler Scientific. Here's the bottom line: XRP and Bitcoin could be worth much more in the future due to the catalysts outlined above, But neither is a wise investment for anyone uncomfortable with extreme volatility, and investors should never anchor to price targets set by Wall Street. Finally, between the two, I would choose Bitcoin in a heartbeat because it has the distinct advantage of being the largest, most liquid, and best known cryptocurrency. Additionally, spot Bitcoin ETFs make it easy to get Bitcoin exposure. The same cannot be said (yet) about XRP. Before you buy stock in XRP, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and XRP wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $659,171!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $891,722!* Now, it's worth noting Stock Advisor's total average return is 995% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 9, 2025 Trevor Jennewine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin, Semler Scientific, and XRP. The Motley Fool recommends Standard Chartered Plc. The Motley Fool has a disclosure policy. 2 Cryptocurrencies to Buy Now Before They Soar 140% and 580%, According to a Wall Street Analyst was originally published by The Motley Fool
Yahoo
9 hours ago
- Yahoo
S&P 500-listed CEO Brian Armstrong warns of looming U.S. debt crisis
S&P 500-listed CEO Brian Armstrong warns of looming U.S. debt crisis originally appeared on TheStreet. Brian Armstrong, CEO of Coinbase, issued a dire warning about the state of the global economy this week, pointing to soaring debt, inflation, and declining economic freedom as the key drivers of rapidly increasing crypto adoption. In a post on X, Armstrong stated, "The world needs crypto, now more than ever," while posting a chart that U.S. federal debt surpassed $34 trillion. Armstrong characterized crypto as a means to regain financial sovereignty, giving individuals the ability to avoid centralized institutions and be able to access fast and cheap global payments. "Economic freedom means it's your money," he shared while referencing the growing demand for Bitcoin and stablecoins as an inflation hedge against out-of-control fiscal policy. His explanation of Coinbase's phased strategy is in three phases. It started as a crypto investment platform, expanded into financial services, and is evolving into an application layer for the next generation of internet tools. He continued explaining the growth of Bitcoin's all-time high and stablecoins, which are adopting more quickly as proof that crypto is "eating the financial services industry." Coinbase made four announcements at its 2025 State of Crypto Summit: Coinbase Business for startups; payment APIs for easy USDC settlements (with Shopify as a proof point), options trading via Deribit integration, and a new Coinbase card with an American Express partnership offering up to 4% Bitcoin rewards. "People are feeling a lack of trust in their money and deficit spending," Armstrong said. "Crypto is the solution—and Coinbase is leading the charge." He added that this movement is not just about price, but about "building a financial system from the ground up." S&P 500-listed CEO Brian Armstrong warns of looming U.S. debt crisis first appeared on TheStreet on Jun 20, 2025 This story was originally reported by TheStreet on Jun 20, 2025, where it first appeared.
Yahoo
9 hours ago
- Yahoo
Billions of login credentials have been leaked online, Cybernews researchers say
NEW YORK (AP) — Researchers at cybersecurity outlet Cybernews say that billions of login credentials have been leaked and compiled into datasets online, giving criminals 'unprecedented access' to accounts consumers use each day. According to a report published this week, Cybernews researchers have recently discovered 30 exposed datasets that each contain a vast amount of login information — amounting to a total of 16 billion compromised credentials. That includes user passwords for a range of popular platforms including Google, Facebook and Apple. Sixteen billion is roughly double the amount of people on Earth today, signaling that impacted consumers may have had credentials for more than one account leaked. Cybernews notes that there are most certainly duplicates in the data and so 'it's impossible to tell how many people or accounts were actually exposed.' It's also important to note that the leaked login information doesn't span from a single source, such as one breach targeting a company. Instead, it appears that the data was stolen through multiple events over time, and then compiled and briefly exposed publicly, which is when Cybernews reports that its researchers discovered it. Various infostealers are most likely the culprit, Cybernews noted. Infostealers are a form of malicious software that breaches a victim's device or systems to take sensitive information. Many questions remain about these leaked credentials, including whose hands the login credentials are in now. But, as data breaches become more and more common in today's world, experts continue to stress the importance of maintaining key 'cyber hygiene.' If you're worried about your account data potentially being exposed in a recent breach, the first thing you can do is change your password — and avoid using the same or similar login credentials on multiple sites. If you find it too hard to memorize all your different passwords, consider a password manager or passkey. And also add multifactor authentication, which can serve as a second layer of verification through your phone, email or USB authenticator key.
