Stephanie Douse 
The BIS economic analysis shows that 90% of central banks are looking into the possibility of adopting central bank digital currencies, or CBDCs as secure payment systems.
According to a new annual economic analysis published by the Bank of International Settlements (BIS), over 90% of central banks around the world are looking into the possibility of adopting central bank digital currencies, or CBDCs. The institution’s long-term monetary vision includes experimenting with new ideas based on confidence in central banks’ stable sovereign currencies and secure payment systems.
The BIS research praised current sovereign fiat money’s ability to offer (relative) price stability and public supervision while condemning crypto’s failure to perform “the core tasks of money” and opacity in terms of public accountability.
The paper did, however, emphasize crypto’s programmability and the borderless components of decentralized finance (DeFi) as possible benefits that might establish a case for inclusion in CBDCs. Three retail CBDCs are currently operational, with 28 pilots. The People’s Bank of China’s digital yuan, which has 261 million users, is now the most popular. In addition, there are quick retail payment systems in over 60 nations.
BIS mentioned recent negative developments in the DeFi industry to support the adoption of centralized digital assets. The downfall of Terra (LUNA) — now called Terra Classic (LUNC) — and the Terra USD algorithmic stablecoin is one example in the paper. The BIS then went on to say that certain blockchains, such as Ethereum (ETH), have limited scalability, which causes network congestion and, as a result, substantial rises in transaction fees.
Due to the enormous fragmentation of such blockchains to solve such problems, it also raised the question of whether layer-1 solutions are feasible. Finally, as part of digital assets’ inherent safety hazards, the research noted a record number of bitcoin hacks in the previous year.