The report, CBDCs & Stablecoins: Key Opportunities, Regional Analysis and Market Forecasts 2023-2030, found that the value of CBDCs — digital currency issued by central banks, and pegged to the country in question’s fiat currency — is around £82m in 2023. 2030’s expected jump, then, represents a surge in growth of roughly 260,000%.

While this sizeable increase reflects that the sector is in its early stages, the report underscored that adoption will be largely driven by governments seeking to leverage CBDC to increase control over how digital payments are made, and to augment financial inclusion among its citizens.

The research also highlighted that domestic payments are set to account for 92% of CBDCs by 2030. Considering that, as of 2023, the percentage of domestic payments for CBDC pilots is nearly 100%, this will be a drop of roughly 8%. North America, Western Europe, and China have been outlined by the reports’ authors to be the geographies that will be most instrumental in driving CBDC usage and transactions.

Seeing as central banks issue CBDCs, they will be closely targeted to domestic payment challenges initially, with cross-border payments coming later, as systems become established and links are made between CBDCs used by individual countries.

Nick Maynard, one of the report’s authors, explained: “While cross-border payments currently have high costs and slow transaction speeds, this area is not the focus of CBDC development.

“As CBDC adoption will be very country specific, it will be incumbent on cross-border payment networks to link schemes together; allowing the wider payments industry to benefit from CBDCs.”

In terms of key limiting factors for the current market, the report highlighted the lack of commercial product development, as well as too few well-defined platforms for central banks to leverage.

In order to truly realise the potential of CBDCs, the report advocates for prospective CBDC platform providers to develop a full end-to-end solution, including wholesale capabilities, wallet provision, and merchant acceptance.

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Around this time last month, DIGIT reported on the UK Treasury’s suggestion that “Britcoin” — Britain’s state-backed CBDC — wouldn’t arrive before 2025.

Now-Prime Minister Rishi Sunak asked the Bank of England to look into backing a digital currency back in 2021, when he served as chancellor.