While CBDCs were once considered a promising tool to enhance cross-border payments, their popularity has fallen sharply, according to the latest annual Future of Payments Survey by the Official Monetary and Financial Institutions Forum (OMFIF), an independent think tank.
The report shows that only 13% of respondents support CBDCs as a solution in 2024, down from 31% in 2023, while nearly half (47%) of central bankers surveyed chose interconnected instant payment systems (such as the FedNow Service in the United States) as their preferred path forward.
In contrast, stablecoins received zero support for the second consecutive year, reflecting central bankers’ lack of confidence in their ability to enhance global financial infrastructure.
The decline in CBDC interest coincides with the Bank for International Settlements’ (BIS) withdrawal from the mBridge project. Although the BIS denied political motivations, the move highlights the tensions around CBDC adoption around the world.
In addition, the survey also highlighted the enduring dominance of the US dollar, with only 11% of central banks reporting a reduction in US dollar usage, mainly due to geopolitical uncertainty driving demand for the US dollar as a safe haven.
The survey also highlighted challenges facing the correspondent banking system, which has long facilitated international settlements but is increasingly seen as outdated and costly due to complex KYC and anti-money laundering (AML) requirements.
The delayed adoption of the ISO 20022 messaging standard could exacerbate this decline, forcing central banks to explore alternatives such as tokenization. More than 40% of developed market central banks see tokenization as a promising innovation and plan to start research in the next three to five years.