Some central banks have dropped out of the digital currency race

As countries around the world race to launch a central bank digital currency (CBDC), some jurisdictions have slowed down or dropped out of the race altogether.

While many observers were pushing a narrative of urgency around CBDCs, some countries have decided that launching a CBDC isn’t currently necessary, while others have tested CBDCs only to dismiss them.

Each country had its own reasons, with global central banks providing very different insights on why their CBDC-related project didn’t go well or didn’t need to launch in the first place.

Cointelegraph has picked up four countries that have either stopped or paused their CBDC or CBDC-like initiatives based on publicly available data.

Denmark

Denmark is one of the top European countries in terms of digital payments, as its population relies on cash far less than other European nations.

The Nordic country was also one of the earliest countries to explore the possibility of issuing a CBDC, with the Danish central bank expressing interest in issuing a digital currency in 2016. The Danmarks Nationalbank then started working on digitizing the local fiat currency and the possible introduction of a Danish digital krone.

After only a year of research, the Danish central bank dismissed the idea of launching a CBDC, ruling that it would do little to improve the country’s financial infrastructure. The regulator argued that Denmark already had a “secure and effective” payments infrastructure in place, which provided instant payment options.

“It is not clear how retail CBDCs will create significant added value relative to the existing solutions in Denmark,” the Danmarks Nationalbank stated in a CBDC-related report in June 2022.

The central bank referred to associated costs and possible risks, also pointing out potential difficulties for the private sector. The bank still continues to monitor global CBDC development has not completely ruled out a CBDC in the future.

Japan

Japan is the third wealthiest economy after the United States and China, and also is the third largest pension market in the world. 

The Japanese central bank — the Bank of Japan (BOJ) — released its initial report on CBDC development in October 2020 and subsequently started testing its digital currency proof-of-concept in early 2021, planning to finish the first pilot phase by March 2022.

Related: Buying Bitcoin ‘will quickly vanish’ when CBDCs launch — Arthur Hayes

However, in January, former BOJ official Hiromi Yamaoka advised…