The Subtle Art of Slow: The CBDC Adoption Journey

In the era of rapidly evolving monetary systems, central bank digital currencies (CBDCs) have emerged as a new frontier.

Already live in various developing and emerging market economies — namely Nigeria (e-Naira), Jamaica (Jam-Dex), the Eastern Caribbean Central Bank (DCash) and the Bahamas (Sand dollar) — these national digital currencies seek to reshape our economic interactions.

However, reactions to these fledgling systems have been a mixed bag. While central banks hoped for quickly-embracing citizen response, the reality has been a slower uptake than expected.

This slower pace may be viewed as disappointing by some, but is it really as underwhelming as it appears? Or is it, perhaps, simply reflecting another aspect of how transformative technologies often find their footing amidst hesitance and a lack of understanding? Could it be that “slow and steady” isn’t a setback but rather a necessary, anticipated part of the CBDC adoption process?

We will address these questions in this article with lessons from history on payment innovation as well as CBDCs launched in developing and emerging market economies.

Unlike the rapid viral adoption witnessed in social media platforms and conversational artificial intelligence (AI) like ChatGPT, the cautious and gradual acceptance of CBDCs, can be seen as the standard trajectory historically observed in the introduction of novel monetary instruments, reflecting the prudence and meticulous validation typically exercised in the financial sector to safeguard stability and trust in monetary innovations.

CBDCs are navigating a path characterized by deliberation and measured, but consistent, growth. The philosophy of “slow and steady” isn’t simply a lack of urgency by citizens to use CBDCs or a failure to kickstart into a sprint. Instead, it’s also a thoughtful, measured approach that, albeit seemingly slower, is endorsed by its benefits. CBDCs aren’t stepping into a void, but rather into a bustling, ever-crowded digital money landscape, making it all the more crucial to build a stable foundation amidst this clamor.

Adopting CBDCs at a slower pace contributes to sustainability, allowing for rigorous tests and updates to technology, fostering a comprehensive policy creation process and encouraging stepwise public awareness.

Through gradual CBDC…