A new study by Juniper Research has forecasted that CBDC transactions will more than double in the next seven years.
The analysis of the fintech and payments market found the value of payments via CBDCs, or Central Bank Digital Currencies, will reach $213 billion annually by 2030; up from just $100 million in 2023.
The expected surge in growth reflects the fact that the sector is still in its early stages with CBDC’s largely limited to pilot projects. Adoption will be driven by governments leveraging CBDCs to boost financial inclusion and increase control over how digital payments are made, the study revealed.
Emerging economies will see the biggest change in access to digital payments as mobile penetration is currently significantly higher than banking penetration in these countries. According to the report, domestic payments will account for 92% of CBDCs by 2030. Cross-border payments will only come later, once systems become established and links made between CBDCs used by individual countries.
“While cross-border payments currently have high costs and slow transaction speeds, this area is not the focus of CBDC development,” said the report’s author, Nick Maynard.
He added, “As CBDC adoption will be very country specific, it will be incumbent on cross-border payment networks to link schemes together; allowing the wider payments industry to benefit from CBDCs.”
The research also identified a lack of commercial product development around CBDCs as a key limiting factor for the current market, with few well-defined platforms for central banks to use. It recommended that CBDC platform providers include wholesale capabilities, wallet provision and merchant acceptance as part of a full end-to-end solution for CBDCs.
