Central Bank Digital Currencies: The Global Race for Digital Money

The People's Bank of China initiated research into a central bank digital currency under Governor Zhou Xiaochuan, becoming the first major central bank to explore digital fiat currency. The project, later named Digital Currency Electronic Payment (DCEP), laid the foundation for the digital renminbi.

The State Council of China approved the development of the Digital Currency Electronic Payment system, partnering with commercial banks, Ant Group, Tencent, Huawei, and JD.com for research and testing. The approval signaled China's intent to create the first major economy CBDC.

The People's Bank of China began public testing of the digital renminbi in Shenzhen, Suzhou, Chengdu, and Xiong'an. State-owned banks distributed digital yuan to consumers through lottery systems, testing reliability, stability, and anti-money laundering controls in real-world retail environments.

The Central Bank of the Bahamas officially launched the Sand Dollar, the world's first nationwide central bank digital currency. The Sand Dollar was designed to increase financial inclusion across the country's 700 islands, where many residents lacked access to traditional banking services.

President Muhammadu Buhari launched the eNaira, Africa's first central bank digital currency. The eNaira was designed to increase financial inclusion, facilitate remittances, and reduce cash usage, though adoption remained below 0.5% of the Nigerian population within the first year.

The digital renminbi was used as the primary cash equivalent across venues and media centers of the Beijing Winter Olympic Games, marking its largest global showcase. Foreign athletes, journalists, and visitors used digital yuan wallets for the first time, demonstrating the currency's cross-border usability.

The Reserve Bank of India launched its digital rupee retail pilot (eRupee) in Mumbai, New Delhi, Bengaluru, and Bhubaneswar with participating banks. The pilot followed a wholesale digital rupee test in November 2022 and positioned India among the largest economies trialing CBDCs.

The Federal Reserve launched FedNow, an instant payment service enabling real-time interbank settlement across the United States. While not a retail CBDC, FedNow represented the US central bank's primary initiative in digital payments infrastructure, processing eligible transactions 24/7/365 with immediate funds availability.

The mBridge project, a joint CBDC initiative between the central banks of China, Hong Kong, Thailand, and the UAE, reached minimum viable product stage for cross-border multi-CBDC payments. The project demonstrated that multiple CBDCs could interoperate for faster, cheaper international settlements.

The European Central Bank's Governing Council decided to move the digital euro project to its preparation phase after a two-year investigation period. The ECB began developing rules for distribution, privacy standards, and offline functionality for a potential digital euro issuance.

The US Congress passed the 21st Century ROAD to Housing Act, which included Section 1101 prohibiting the Federal Reserve from issuing a digital asset that is a direct liability of the Federal Reserve System and widely available to the general public, effectively constraining a US retail CBDC at the federal level.