The U.S. and Cross-Border CBDC Collaboration
While the United States has not yet launched its own retail CBDC, it remains deeply involved in cross-border digital currency projects. The U.S. is currently participating in Project Agorá, a collaboration between six other central banks aimed at enhancing cross-border wholesale CBDC transactions.
However, U.S. lawmakers remain divided on the issue of CBDCs. In May 2024, the U.S. House passed a bill prohibiting the direct issuance of a retail CBDC, but the Senate has yet to act, leaving the future of the digital dollar uncertain.
CBDCs have even become a topic of debate in the ongoing U.S. presidential campaign, as candidates weigh the potential benefits and risks of implementing a government-backed digital currency.
Geopolitical Impacts and CBDC Expansion
Global conflicts have further accelerated the push for CBDC development. Since Russia’s invasion of Ukraine and the subsequent G7 sanctions, cross-border wholesale CBDC projects have more than doubled, with 13 active collaborations currently underway. These initiatives include Project mBridge, which connects banks from China, Thailand, the UAE, Hong Kong, and Saudi Arabia. As CBDCs gain momentum, many expect mBridge to expand to more countries in the near future.
The digital yuan (e-CNY) remains the largest and most ambitious CBDC pilot globally. By June 2024, the People’s Bank of China had processed 7 trillion e-CNY ($986 billion) in transactions across sectors such as education, healthcare, and tourism. This remarkable figure is almost four times higher than the e-CNY transaction volume recorded just a year earlier.
Conclusion: The Future of Money is Digital
The shift towards CBDCs signifies a profound transformation in how nations approach their monetary systems. As more central banks adopt or explore digital currencies, the implications for global finance, cross-border transactions, and geopolitical dynamics are significant.
CBDCs offer the potential for faster, more secure payments, increased financial inclusion, and reduced dependency on traditional banking systems. However, they also raise critical questions around privacy, security, and the role of government oversight in the future of money.
As these digital currencies continue to evolve, countries will need to carefully balance innovation with regulation to harness the full potential of CBDCs while safeguarding economic stability.
