Exploring Central Bank Digital Currencies for Tokenization by the World Federation of Exchanges
Global Progress in Central Bank Digital Currency (CBDC) Adoption
As of mid-2025, the world is witnessing significant strides in the adoption of Central Bank Digital Currencies (CBDCs). A staggering 100 countries are either engaged in CBDC-related development or research, with 72 countries actively pursuing projects and 35 more exploring the concept [1]. Approximately 14% of these central banks have already moved into pilot phases.
Key Trends and Design Aspects
The prevailing CBDC architecture tends to be a two-tier system that leverages distributed ledger technology (DLT) and a token-based access model [3]. Researchers and policymakers are particularly interested in CBDCs for their potential to improve cross-border payments, aiming to reduce inefficiencies and delays in traditional banking systems [3].
Tokenization and CBDCs
CBDCs are designed as digital tokens representing central bank money, distinct from cryptocurrencies. Token-based CBDCs offer benefits like traceability, programmability, and more efficient settlement. This tokenization underpins features such as privacy controls, real-time transaction tracking, and interoperability with other digital assets or payment systems [3].
Regulatory and Political Context
The regulatory and political landscape, particularly in the U.S., is dynamic and somewhat cautious. In July 2025, the U.S. House passed three major digital currency-related bills, including the CBDC Anti-Surveillance State Act, which effectively prohibits the Federal Reserve from developing or issuing a CBDC without explicit Congressional authorization [2][5]. This signals strong legislative oversight and concern regarding privacy and surveillance issues with CBDCs.
Meanwhile, the U.S. also enacted the GENIUS Act, providing a stablecoin regulatory framework, which may indirectly influence CBDC ecosystem development by establishing clearer digital payment norms [2][5].
Broader Market Context
The growing institutional adoption of cryptocurrencies and digital assets as reserves or treasury assets suggests a transition of digital currencies — including CBDCs — from fringe experiments into mainstream financial infrastructure in some economies [4].
Case Studies and Initiatives
The European Union has announced an interim RTGS - DLT payment solution, with plans for a more comprehensive wCBDC. This move follows the success of Switzerland's wCBDC pilot at SIX Digital Exchange (SDX), which encouraged half a dozen bond issuances during a six-month period [1]. Besides Switzerland, Brazil, Hong Kong, and the UAE are also working on wCBDC pilots or planning launches.
In the UK, there's a private wholesale settlement institution, Fnality, planning to launch in the United States. Fnality's digital cash is backed by reserves held at the central bank, and its planned launch indicates the global expansion of wCBDC initiatives [1].
Challenges Ahead
One challenge for CBDCs is the inability of a DLT to keep up with the settlement of microsecond transactions. Additionally, there's a question as to whether CBDCs will mainly be used when the RTGS system is closed, and whether extending RTGS operating hours would be more beneficial [1]. Another question is whether a piece of code can fulfil a similar purpose to CCPs in a future tokenized world [1].
In conclusion, CBDC adoption is advancing globally with a majority of central banks exploring and piloting tokenized digital currencies using DLT frameworks, driven by goals of payment efficiency and financial innovation. However, adoption faces significant regulatory and privacy hurdles, with key jurisdictions like the U.S. legislating cautiously and requiring Congressional authorization before CBDC issuance [1][2][3][5]. Tokenization remains central to CBDC design, enabling new functionalities and integration into broader digital finance ecosystems.
References: [1] CBDC Tracker - Bank for International Settlements (BIS) [2] Digital Dollar Project - Federal Reserve Bank of New York [3] Central Bank Digital Currencies: A Survey of Current Developments - International Monetary Fund (IMF) [4] Institutional Investment in Cryptocurrencies and Digital Assets - Grayscale Investments [5] Digital Asset Market Structure and Investor Protection - U.S. Securities and Exchange Commission (SEC)
- The world's progress in Central Bank Digital Currency (CBDC) adoption is marked by an unprecedented level of interest, with 100 countries engaged in research or development, 72 actively pursuing projects, and 35 exploring the concept.
- Central Bank Digital Currencies (CBDCs) are designed as digital tokens based on distributed ledger technology (DLT), offering benefitting features like traceability, programmability, and more efficient settlement.
- In the health-and-wellness industry, researchers are investigating potential applications of CBD-based tokens as a part of digital assets, aiming for improved patient tracking and streamlined transactions.
- Improvements in finance technology have enabled more efficient cross-border payments, with CBDCs hoped to reduce inefficiencies and delays in traditional banking systems.
- The United States political landscape is dynamic with regards to CBDCs, having passed three major digital currency-related bills and enacted the GENIUS Act, which may indirectly influence the development of CBDC ecosystems.
- Regulation and privacy concerns are important factors in the CBDC industry, with the Federal Reserve in the U.S. needing explicit Congressional authorization to develop or issue a Central Bank Digital Currency.
