MasterCard Predicts Shift in Central Bank Digital Currency Strategies by 2025
1min read MasterCard, a leading global payments company, has predicted a shift in central bank digital currency (CBDC) issuance strategies by 2025. According to Raj Dhamodharan, MasterCard's head of crypto and blockchain, central banks are expected to move away from retail-focused CBDCs and instead focus on creating digital assets for financial institutions.
In a recent blog post, Dhamodharan noted that the trend may be influenced by President Trump's executive order on digital assets, which aims to prevent the creation of a CBDC. The order highlights the potential risks of CBDCs to financial stability and encourages the private sector to drive innovation in digital currencies.
Dhamodharan expects that by 2025, more central banks will follow this trend, abandoning consumer-focused CBDCs (retail CBDCs) in favor of digital assets targeted at the banking sector and other financial institutions (wholesale CBDCs). These wholesale CBDCs could significantly enhance institutional settlement capabilities and facilitate faster capital movement across jurisdictions.
Last year, the World Economic Forum (WEF) reported that 98% of central banks were planning to issue their own CBDCs, with the potential for 24 live CBDCs by 2030. However, MasterCard's prediction suggests a shift in focus towards wholesale CBDCs, reflecting the evolving priorities of central banks in the digital currency landscape.
