Central Bank Digital Currency adoption is accelerating as 137 countries representing 98% of global GDP actively explore digital currencies. With major CBDC pilots expanding across Europe, China scaling its digital yuan, and African nations deploying retail CBDCs, the landscape for stablecoins, decentralized finance, and cross-border payments faces significant transformation.
Europe And China Lead Global CBDC Development
The European Central Bank confirmed its digital euro project will reach a launch decision following successful pilot programs with commercial banks and payment providers. The ECB is conducting real-world tests focused on privacy features, offline payment capabilities, and interoperability across the euro area. Legislative consultations with the European Parliament advanced in 2025, positioning the digital euro as a complement to cash while strengthening Europe’s digital sovereignty.
China’s digital yuan dominates global CBDC development with 260 million domestic users and transaction volume reaching 7 trillion yuan, approximately $986 billion. The People’s Bank of China expanded trials to include cross-border settlements through Project mBridge, connecting China, Thailand, the United Arab Emirates, Hong Kong, and Saudi Arabia for oil payment settlements and foreign exchange operations.
The United Arab Emirates launched its Digital Dirham pilot in November 2025, with plans for gradual expansion into peer-to-peer, commercial, and cross-border use cases. The full launch targets late next year, positioning Dubai as a global CBDC hub through partnerships with JPMorgan Chase & Co. (JPM) and HSBC Holdings PLC (HSBC). The Digital Dirham aims to reduce remittance costs while improving transparency and interoperability with other digital payment systems.
Africa’s Retail CBDC Momentum Builds
Nigeria’s eNaira, launched in 2021, represents Africa’s first major retail CBDC and continues expanding domestically. The Central Bank of Nigeria focuses on financial inclusion, targeting the 70% of citizens without bank accounts. Jamaica and the Bahamas maintain fully operational CBDCs, with the Sand Dollar being the world’s first retail CBDC, launched in 2020.
South Africa is conducting digital rand trials with commercial banks, though regulatory fragmentation delays broader availability. The South African Reserve Bank navigates challenges across the continent, where banking infrastructure varies significantly between regions, creating opportunities for CBDCs to leapfrog traditional banking systems.
How CBDCs Impact Stablecoins And Decentralized Finance
The relationship between CBDCs and stablecoins will define digital currency evolution. United States officials support dollar-backed stablecoins through the GENIUS Act, passed in July 2025, requiring issuers to maintain full reserves and publish monthly attestations. This creates the first comprehensive federal framework governing stablecoins, contrasting sharply with the US executive order banning Federal Reserve involvement in retail CBDCs.
Stablecoin market capitalization exceeded $300 billion in October 2025, with transaction volumes reaching $4 trillion in the first three quarters. The technology increasingly serves cross-border payments, decentralized finance collateral, and remittance services. However, CBDCs present direct competition for payment use cases while potentially limiting stablecoin market share in jurisdictions prioritizing sovereign digital currencies.
CBDCs built on permissioned blockchains cannot interact with smart contracts on public networks, restricting their utility in DeFi applications. Stablecoins maintain advantages for decentralized lending, liquidity provision, and automated financial services. This technical distinction suggests coexistence rather than replacement, with CBDCs handling everyday transactions and stablecoins powering blockchain-native financial innovation.
Cross-Border Payment Transformation Accelerates
CBDC development accelerated following geopolitical tensions, with cross-border wholesale CBDC projects more than doubling since 2022. Thirteen wholesale CBDC initiatives now operate globally, including Project mBridge, which completed real-value transaction tests exceeding $22 million. Traditional cross-border transfers through SWIFT take three to five business days, while CBDC settlements complete in seconds without intermediaries.
The Bank for International Settlements Project Icebreaker demonstrated the benefits of cross-border CBDC payments, reducing settlement times and costs dramatically. Sweden’s Riksbank announced plans to move its eKrona from pilot to full deployment in early next year following successful legal reviews. Australia initiated cross-border trials of its eAUD CBDC with Singapore and New Zealand to test cross-jurisdictional payment infrastructure.
BRICS nations including Brazil, Russia, India, China, and South Africa are developing interconnected CBDC systems targeting reduced dollar dependency. Russia requires its largest banks to provide full digital ruble services by July 2025, with mandatory business acceptance following in phases through 2027.
Competitive Dynamics Shape Digital Currency Future
The divergence between US stablecoin support and European CBDC advancement creates competing visions for the digital currency future. US policymakers view stablecoins as extending dollar reserve currency status globally, while European officials argue CBDCs provide financial stability that privately issued tokens cannot guarantee.
The global financial system is evolving toward three distinct digital money layers. Traditional bank deposits will anchor credit and investment functions. Stablecoins will dominate blockchain ecosystems and rapid international payments. CBDCs will ensure universal access to secure, state-issued digital money. The interaction between these systems represents the most significant transformation in financial infrastructure since electronic banking emerged.
Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.
© 2025 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
