Central Bank Digital Currencies: Where Pilot Projects Stand in 2026

What happened?

Central banks representing the large majority of global economic output have now researched, piloted or in a small number of cases launched some form of central bank digital currency, according to tracking maintained by the Bank for International Settlements. In 2026, the picture remains uneven: a handful of countries, including several in the Caribbean and West Africa, have live retail systems in limited use, China's digital yuan pilot continues to expand across additional cities and use cases, and the European Central Bank continues preparatory work on a digital euro without having reached a final decision to issue one.

Meanwhile several major economies, including the United States, have taken a more cautious or openly sceptical stance toward retail digital currency, citing concerns about financial privacy, the potential for disintermediating commercial banks, and questions over whether existing digital payment systems already meet most consumer needs. The result is a fragmented global landscape in which technological capability has outpaced political and institutional consensus on whether, and how, to proceed.

Key points

• The large majority of the world's central banks are researching or piloting a digital currency, per Bank for International Settlements tracking.
• China's digital yuan remains the largest and most advanced retail pilot, expanding gradually across cities and payment use cases.
• The European Central Bank continues preparation work on a digital euro but has not made a final decision to issue one.
• Some smaller economies, particularly in the Caribbean and West Africa, have gone furthest toward live, if modestly used, retail systems.
• Concerns about bank disintermediation, privacy and cybersecurity remain the central obstacles to broader adoption.

What we know

The Bank for International Settlements, which coordinates research among the world's central banks, has published repeated survey rounds showing that interest in central bank digital currencies remains high even as actual issuance lags behind pilot activity. Its data distinguishes between wholesale CBDCs, intended for use between financial institutions to settle large transactions, and retail CBDCs, intended for use by the general public, with wholesale projects generally progressing faster and facing fewer political obstacles.

China's digital yuan, run by the People's Bank of China, remains the most extensive retail pilot among major economies, having expanded to cover a large number of cities and integrated with various transport, retail and government payment systems, though usage relative to existing private payment platforms remains modest by the central bank's own public statements. The European Central Bank has continued technical preparation on a digital euro, including work on privacy-preserving transaction design and offline payment capability, while stressing that any launch decision remains subject to further legislative and governance steps within the European Union.

Officials and experts

Officials at the Bank for International Settlements have consistently argued that central bank digital currencies could improve payment efficiency, financial inclusion and resilience of national payment systems, particularly in economies with less developed private banking infrastructure, while cautioning that design choices around privacy, holding limits and interest-bearing features carry significant implications for financial stability. The organisation has also highlighted cross-border payment efficiency as a key potential benefit that multiple national digital currency systems could unlock if designed with interoperability in mind.

European Central Bank leadership has repeatedly emphasised that a digital euro is intended to complement, not replace, cash and existing private payment methods, and would be designed with strict limits on individual holdings to prevent large-scale shifts of deposits out of the commercial banking system during periods of stress. Federal Reserve officials in the United States have taken a notably more cautious public posture, citing unresolved privacy and legal questions, and have generally deferred any near-term decision on a retail digital dollar to elected policymakers.

Background

Interest in central bank digital currencies accelerated significantly following China's early pilot launches in the late 2010s and the rapid rise of private cryptocurrencies and stablecoins, which prompted many central banks to examine whether public digital money alternatives were needed to preserve monetary sovereignty and public trust in payment systems. The COVID-19 pandemic further accelerated the shift toward digital and contactless payments globally, adding urgency to central bank research programmes.

Early pilot projects in the Bahamas, Jamaica and Nigeria demonstrated both the technical feasibility of retail digital currencies and the practical challenges of driving adoption, with usage in each case remaining well below initial expectations despite public education campaigns and, in some instances, financial incentives for adoption. These early experiences have shaped the more cautious, incremental approach many larger central banks have since adopted.

Detailed analysis

A central design tension running through nearly every CBDC project concerns the role of commercial banks. If a central bank digital currency offers a safe, government-backed alternative to bank deposits, it could in principle attract funds away from commercial banks, particularly during periods of financial stress when depositors might prefer the perceived safety of central bank money. To manage this risk, most advanced projects, including the digital euro, have incorporated design features such as holding limits and the deliberate exclusion of interest payments, intended to make the digital currency useful for payments without making it an attractive long-term store of value that could destabilise bank funding.

Privacy considerations represent another major fault line. Cash offers a high degree of transactional anonymity, and many potential users of digital currencies, particularly in democracies with strong civil liberties traditions, have expressed concern that a central bank digital currency could enable more extensive government monitoring of personal spending than is currently possible with private payment cards, which are already tracked by commercial intermediaries. Central banks pursuing retail CBDC projects have generally responded by proposing tiered privacy models, in which small transactions receive stronger anonymity protections than larger ones, though the technical and legal frameworks to implement this convincingly remain works in progress in most jurisdictions.

The comparative success of wholesale CBDC projects, which are used between financial institutions rather than directly by consumers, reflects the fact that these systems address a narrower and more clearly defined problem: faster, cheaper settlement of interbank and cross-border transactions, without raising the same privacy or disintermediation concerns associated with retail systems. Projects coordinated through the Bank for International Settlements' innovation hub, involving multiple central banks testing shared wholesale settlement platforms, have shown measurable improvements in cross-border payment speed and cost in pilot conditions, generating more consistent enthusiasm from financial institutions than retail projects have generated from the general public.

Adoption challenges in early retail pilots also highlight a broader lesson: technological availability alone does not guarantee usage. In several pilot markets, existing private payment methods, including mobile money platforms and bank cards, were already convenient and widely trusted, leaving limited additional benefit for consumers to switch to a government-run digital alternative. This suggests that future retail CBDC projects may need to offer distinctive advantages, such as offline functionality, lower transaction costs for merchants, or specific financial inclusion benefits for unbanked populations, to achieve meaningful adoption rather than relying on novelty or government backing alone.

Geopolitical considerations have also entered the debate, with some analysts and officials suggesting that a widely adopted digital yuan could, over time, support the international use of the Chinese currency in trade settlement, potentially challenging the dollar's dominant role in some regional trade corridors, though most economists view this as a gradual and uncertain process rather than an imminent shift, given the dollar's deeply entrenched position in global reserves, trade invoicing and financial markets.

Why it matters

For everyday consumers, the practical impact of central bank digital currencies so far has been limited in most countries, given how few retail projects have achieved meaningful usage. However, the underlying design choices being tested now, particularly around privacy, offline access and interoperability, will likely shape the digital payment infrastructure many people rely on over the coming decade, whether that infrastructure is ultimately built by central banks, private companies, or some combination of both.

For the banking sector, the resolution of the disintermediation debate carries direct implications for how banks fund lending and manage deposits, particularly during periods of financial stress. For policymakers, the international coordination challenges around cross-border CBDC interoperability will shape whether the emerging system fragments along regional or geopolitical lines or moves toward more unified global standards, with implications for trade, remittances and financial stability worldwide.

What happens next?

The European Central Bank is expected to continue technical and legislative groundwork on the digital euro through 2026 and beyond, with any final launch decision remaining contingent on political agreement within European Union institutions. China is likely to continue the gradual expansion of the digital yuan's use cases domestically, while closely watching its potential role in international trade settlement.

Elsewhere, most central banks are expected to continue research and limited piloting rather than moving to full retail launch in the near term, with wholesale CBDC projects for interbank settlement likely to see faster practical progress than retail systems aimed at the general public. The Bank for International Settlements is expected to continue publishing comparative research intended to help smaller central banks learn from the successes and setbacks of earlier pilot programmes.