India and China Lead the Charge in CBDC Adoption, Finds CFA Institute Survey

CFA Institute survey reveals that India and China lead in CBDC interest, driven by the pursuit of financial inclusion and stability

By Shashank Bhardwaj

Published: Jul 28, 2023 03:55:52 PM IST

Updated: Jul 28, 2023 04:14:40 PM IST

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A recent survey conducted by the CFA Institute on Central Bank Digital Currencies (CBDCs) has revealed that emerging markets, with India and China at the forefront, are strongly interested in adopting CBDCs.

According to the 'Global Survey on Central Bank Digital Currencies,' 42% of respondents worldwide supported central banks introducing CBDCs.

The survey highlighted the Asia-Pacific region's greater receptivity to CBDCs, particularly among the younger generation, developing economies, and specifically in China and India. The motivation behind this interest lies in pursuing financial inclusion and stability. Developing markets have placed more emphasis on the role of CBDCs in enhancing financial inclusion.

The report further detailed that in the Asia-Pacific region, where digital innovation has been on the rise, interest in CBDCs has been substantial. The sudden rise and fall of private cryptos have also sparked curiosity about CBDCs in the region.

The data showcased strong support for CBDCs in India and China, with 66% and 70% of respondents in favour of launching CBDCs respectively. This support reflects the increasing acknowledgement of the potential benefits which CBDCs offer to the financial landscape.

In India, the CBDC initiative, eRupee, has been undergoing pilot testing since December 2022. The Reserve Bank of India (RBI) is working with multiple lenders and retailers to explore the practical applications of the eRupee. The RBI plans to enable CBDC payments using existing Unified Payments Interface (UPI) QR codes, paving the way for easier adoption.

China's CBDC, e-CNY, has already been implemented in various cities. The Chinese government has been testing its use cases, including paying government employees' salaries and gifting e-CNY on special occasions.

The survey indicated that the primary reason to explore CBDCs was to facilitate faster payments and transfers. Furthermore, asset management, investment firms, brokerage firms, commercial banks, IT firms, and insurance providers expressed a favourable view of CBDCs, believing they could enhance financial inclusion and improve services.

As the CBDC revolution gains momentum, the survey findings suggest that India and China play pivotal roles in shaping the future of digital currencies. With ongoing research and development, countries across the globe are exploring the potential benefits and challenges associated with CBDC adoption.

Shashank is the founder of yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash