Central Bank Digital Currencies Global Trends

Central Bank Digital Currencies (CBDCs) are rapidly expanding in 2025, with over 134 countries representing 98 percent of global GDP exploring or implementing them, a major rise from just 35 in 2020.
As of May 2025, 11 countries have fully launched CBDCs, 44 are running pilots, and the rest remain in research phases. This surge reflects a global push to modernize financial systems, enhance inclusion, and maintain monetary control as cryptocurrencies and stablecoins reshape expectations.

Quick key takeaways

• CBDCs are moving beyond theory with pilots accelerating across major economies
• Cross border payments and government disbursements are the strongest early use cases
• In 2026, privacy by design and bank stability protections will decide public trust

What is a CBDC in simple words
A CBDC is digital money issued by a central bank. It is designed to work like national currency, but in digital form.

Global Adoption and Progress

The expansion of CBDCs has gained momentum, with every G20 country now involved. Countries like Brazil, India, Japan, and Russia are in advanced pilot stages, while the Bahamas, Jamaica, and Nigeria have fully launched retail CBDCs, focusing on domestic growth.

The European Central Bank (ECB) is preparing for a digital euro, originally targeting progress completion around October 2025, while the U.S. is exploring wholesale CBDCs through Project Agorá alongside six other major central banks.

Cross-border initiatives, such as Project mBridge connecting China, Thailand, the UAE, Hong Kong, and Saudi Arabia, have doubled since 2022, aiming to streamline international payments.

To see the bigger picture, cbdc growth global adoption explains how fast digital money is spreading worldwide.

Will CBDCs replace cash completely
Not likely in the short term. Most central banks position CBDCs as a digital option alongside cash, not a full replacement.

Driving Forces Behind CBDC Expansion

Several factors fuel this global trend.

First, CBDCs aim to enhance financial inclusion by giving digital payment access to underbanked communities. Second, they reduce cross-border transaction costs and delays, which currently average 6.25 percent for sending smaller transfers and can still take days to settle. 

Third, central banks want to counter the rise of cryptocurrencies and stablecoins to maintain monetary sovereignty. For example, China’s e-CNY was partly a response to dominant private payment platforms. Finally, CBDCs can improve transparency, helping combat money laundering and illicit financing, though this traceability also raises privacy concerns.

CBDCs also compete with AI applications in cryptocurrency, which are increasingly optimizing transaction routing and verification across digital networks.

Applications and Benefits

CBDCs generally come in two forms.

Retail CBDCs are meant for everyday public use. They support direct digital payments and often work through banks or wallet providers, which can help expand inclusion.

Wholesale CBDCs are designed for interbank settlements, cross-border transfers, and securities clearing. These can reduce reliance on legacy rails and improve settlement speed.

Many policy discussions highlight that CBDCs can replicate cash-like accessibility while supporting low-cost, real-time transfers with fewer intermediaries.

Alongside CBDCs, tokenized deposits dlt are another major path banks are exploring to modernize settlement.

What is the biggest benefit of CBDCs for normal people
Faster and cheaper payments, especially for domestic transfers and government payouts, with fewer hidden fees.

Challenges and Privacy Concerns

Despite their promise, CBDC expansion faces significant hurdles.

Privacy is a major concern. Public discussion often highlights fears that CBDCs could enable excessive monitoring or control if poorly designed. While major central banks have acknowledged privacy as a top priority, centralized infrastructure can still increase systemic risk if sensitive data is exposed.

CBDCs could also disrupt commercial banks by reducing deposits, potentially creating liquidity stress if adoption scales too quickly. If large deposit shifts happen during uncertainty, it could amplify instability.

Another overlooked issue is sustainability. CBDC infrastructure must scale securely and reliably, which can increase energy use across networks and data systems, especially if real-time settlement expands massively.

A Critical Perspective

CBDCs are often framed as a financial upgrade, but the story is more complicated.

While they promise inclusion and efficiency, digital access barriers still exist. Digital literacy gaps, network reliability, and uneven infrastructure can limit real adoption, particularly in rural or low-connectivity regions.

There is also a real debate about centralized control. If governments implement restrictive programmability, users may fear reduced freedom in how money is spent. Even when that is not the goal, public perception can still slow adoption.

Cross-border CBDC success also depends on geopolitics. Competing CBDC systems could fragment global finance rather than unify it, especially if standards are not aligned across regions.

The Future of CBDCs and What to Watch in 2026

CBDC expansion in 2025 signals a transformative shift in global finance, with projections estimating 7.8 billion CBDC transactions by 2031, a 2,430 percent increase from 2024.
This growth is being driven by central banks looking to protect monetary sovereignty while modernizing payment infrastructure.

In 2026, the difference between success and backlash will be design choices that build trust. The safest direction includes:

• Offline payments support for resilience
• Tiered privacy protections based on transaction size
• Holding limits to reduce bank run risk
• Clear rules on data collection and third party access

CBDCs may become one of the most important payment shifts of the decade, but only if privacy, stability, and public trust are treated as core features, not afterthoughts.