Instant Payments and CBDCs, Chalk and Cheese

Dateline: London, 27th September 2023.With the interest in central bank digital currencies (CBDCs) growing and the debate about the requirements of, goals for and constraints to the architecture of such digital currencies continuing, I was pleased to see that Mastercard has announced a  CBDC Partner Program to to foster collaboration with key players in the space.ShareExploring CBDCsWith CBDCs springing up around the globe, there are some early lessons to be learned, and one of them is that they are slow starters. The digital Yuan, the biggest CBDC scheme in place, has transacted some $250 billion, which means the digital currency has seen significant growth year-on-year but it remains relatively small scale. The volume will soon reach a cumulative billion transactions made from approximately 120 million wallets with an average transaction amount of roughly $260.(By comparison remember that WeChat has a billion user and Alipay has 1.2 billion users. Alipay processed 544,000 transactions per second during 2019’s Single’s Day shopping event.)Juniper Research reckon that the global value of central bank digital currencies (CBDCs) will grow dramatically from $100 million today to more than $200 billion by 2030 and that 92% of the total value transacted through CBDCs around the world will be paid domestically. This means that despite all of the talk of the BRICS and de-dollarisation, the initial use cases for a digital dollar will be to bring (in my view) innovation, resilience and competition to the U.S. market.with kind permission of Helen Holmes (CC-BY-ND 4.0)Hence the way in which the digital dollar (and…Instant Payments and CBDCs, Chalk and Cheese