Slowdown in CBDC Rollout as Countries Reassess Risks

As nations around the globe navigate the complexities of digital finance, the rollout of Central Bank Digital Currencies (CBDCs) has encountered significant delays. Many countries are now pausing their plans to introduce state-backed digital currencies to evaluate the evolving risks.

Key Takeaways

Multiple countries are slowing down or pausing CBDC development due to economic uncertainty and regulatory challenges.
South Africa highlights the need for a retail CBDC that mimics cash usability and provides broader access to digital financial services.
Regulatory uncertainties surrounding stablecoins are causing central banks to rethink the necessity of issuing CBDCs.
Emerging markets, especially in the Middle East and Africa, are accelerating their CBDC initiatives in response to competition from China's digital yuan.

CBDC rollout slows as countries hit pause, reevaluate risks - 1

South Africa's National Payment System Gaps

About 16% of South African adults are still unbanked, primarily depending on cash transactions. Consequently, the South African Reserve Bank aims to enhance accessibility through quicker and more economical digital services. A retail CBDC would need to emulate essential traits of physical cash, such as offline capabilities, broad acceptance, user-friendly interfaces, and strong privacy measures. These benchmarks must be met before any deployment can occur, as emphasized in a recent report.

Current efforts are focused on modernizing settlement infrastructure and improving connectivity among financial institutions, laying the groundwork for digital finance. The report indicated that a retail CBDC might be integrated into this system later when its advantages surpass costs. The slow adoption rates in several countries that have introduced digital currencies have also influenced South Africa's prudence.

Factors Behind the Delay

Various elements are contributing to the CBDC slowdown. A primary concern lies in the ongoing regulatory uncertainties surrounding stablecoins. The rising popularity of stablecoins is prompting central banks to reevaluate the necessity of issuing their own digital currencies. Countries such as South Korea are shifting their focus to stablecoin legislation instead, while places like the UK are exploring whether private solutions can meet similar objectives without a fully state-run structure.

From an economic standpoint, the expenses and intricacies of launching a national digital currency are proving hard to justify, especially when existing systems continue to function effectively. In nations like South Korea and the UK, governments have chosen to redirect resources toward addressing other pressing economic challenges rather than advancing CBDC projects. Additionally, concerns regarding public adoption linger, with fears that CBDCs may experience sluggish uptake or resistance from citizens accustomed to traditional banking methods.

A Global Pause or Just a Temporary Setback?

Despite the slowdown in CBDC projects garnering attention in 2025, this trend is not universal. Many emerging markets are intensifying their CBDC development, particularly in the Middle East and parts of Africa, where digital currencies could significantly enhance financial inclusion. These regions are also facing increasing competition from China’s digital yuan, which is already in circulation in select areas, encouraging other nations to expedite their CBDC initiatives.

Currently, however, most developed countries appear to be moderating their CBDC efforts—either to reevaluate the economic implications or to await the stabilization of stablecoin regulations before delving deeper into the realm of digital currencies.