Payments giant MasterCard is forecasting that central banks will shift away from retail CBDCs (central bank digital currencies) and focus more on offering digital assets to banks and financial institutions.
In a new blog post from Raj Dhamodharan, MasterCard’s head of crypto and blockchain, the analyst says that he’s expecting central banks will lean away from issuing consumer-based digital currencies and focus on creating digital assets for institutions.
Dhamodharan notes that part of the trend may be driven by President Trump’s executive order on digital assets, which specifically instructs the federal government to prevent the creation of a CBDC.
“Just a few years ago, many of the world’s central banks were looking at the feasibility of issuing their own currencies in digital form. Today, more and more central banks have concluded that the private sector is innovating well on its own and that central bank digital currencies aimed at the general public needn’t be a high priority. In fact, another element of Trump’s executive order on digital assets bans the development and issuance of CBDCs, calling them a threat to the stability of the financial system.
In 2025, I expect that more central banks will follow this trend, moving away from consumer-focused CBDCs, known as ‘retail’ CBDCs. But they will continue to pursue digital assets aimed at the banking sector and other financial institutions, also known as ‘wholesale’ CBDCs. These CBDCs could fundamentally increase institutional settlement capabilities and enable the faster movement of capital across jurisdictions.”
Last year, the World Economic Forum (WEF) said that 98% of central banks were planning on issuing their own CBDCs, and anticipated that there could be 24 live CBDCs by 2030.
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