Central banks around the world are actively researching, testing and piloting Central Bank Digital Currency (CBDC), with several countries already deploying digital money for public use. However, despite growing interest, day-to-day recruitment among citizens remains limited.
CBDC offers several distinct advantages. It allows governments and central banks to implement monetary policy more efficiently, and automatically implements processes such as tax credits and foreign investment regulations. Additionally, CBDC reduced the costs and complexity of printing and managing physical cash.
India, widely recognized for its successful digital payments through UPI, is focusing on the next milestone with programmable digital money. The country launched the Digital Rupee Pilot in December 2022, and in early 2024 it had 1.3 million users and over 300,000 merchants. Pilots use token-based offline models to smoothly integrate with existing digital infrastructure such as UPI and Aadhaar.
Aishwary Gupta, global payments director at Polygon Labs, was opened up about how different countries are learning from CBDC experiments. “As of 2024, over 130 countries, accounting for 98% of global GDP, are investigating CBDCs,” Gupta said in an interview with Coinpedia. “However, adoptions are uneven. China’s E-CNY has over 260 million wallets and has processed over $2500 billion, but daily usage remains limited. Nigerian Enaira struggles to adopt, primarily due to the gap between trust and utility.”
He added that India’s early success was due to its strong digital infrastructure and public-private collaboration. Gupta believes that CBDCs must address real-world challenges such as financial inclusion and remittances, while maintaining privacy to gain public trust.
“Public-private partnerships, strong identity frameworks, and clear communication are important. Ultimately, trust in the CBDC is built not through publication, but through design, transparency, and impact,” the expert said.
Bigger discussion: Control vs. Privacy
The central bank claims that the CBDC is intended to complement cash, but critics have argued that it can ultimately strengthen government control over the financial system. As the world moves towards tokenized assets and decentralized technologies, concerns about privacy, surveillance and economic freedom in a CBDC-led economy continue to grow.
While the global CBDC experiment is still in its early stages, the conversations about trust, privacy and the role of central banks in the digital future are becoming bigger.