How Central Banks Quietly Experiment with Blockchain

For years, blockchain was seen as the rebel technology behind Bitcoin.

Now, central banks, once thought of as the slowest players in finance, are running blockchain pilots of their own. Some of these tests involve millions of users, others just a few banks, but together they show how seriously governments are taking the idea of central bank digital currencies (CBDCs).

Central Banks’ Blockchain Projects Across the World

This article draws on insights from Igor Izraylevych, CEO of S-PRO. His team has worked on blockchain projects across regions, giving him a close look at how CBDCs are unfolding behind the scenes.

China

China’s digital yuan (e-CNY) is the largest live CBDC experiment. By mid-2024, pilot programs covered 180–260 million wallets, with cumulative transactions exceeding 7.3 trillion yuan (≈ US$1 trillion).

In Shenzhen alone, more than 35.9 million wallets were active by mid-2023. People use e-CNY to pay for metro rides, groceries, and even receive subsidies directly from local governments.

Yet adoption has been uneven. Alipay and WeChat Pay still dominate mobile payments.

Igor explains: “China shows scale like no other. They proved you can roll out a digital currency to hundreds of millions. But the lesson is clear: even the best tech faces competition from habits. People don’t change payment tools overnight.”

Europe

The European Central Bank (ECB) has been studying a digital euro since 2021. In 2023, it launched a preparation phase running until 2025, with pilot tests in Spain, France, and Germany. The ECB insists the digital euro will complement, not replace, cash.

The hard part is privacy. Citizens demand anonymity, but regulators require strong anti-money laundering controls.

As Igor notes, “Europe is stuck between two truths. If you make the digital euro traceable, people may avoid it. If you make it anonymous, regulators won’t approve. The balance they strike will define adoption.”

For technical groundwork, the ECB works with partners, including blockchain development companies, to explore secure and scalable designs without reinventing the wheel internally.

United States

The Federal Reserve remains cautious. It has not launched a digital dollar pilot, though it has studied the topic and collaborated with MIT on Project Hamilton. That project showed technical promise, simulating over 100,000 retail transactions per second.

So far, though, politics holds the Fed back. Some lawmakers warn of surveillance risks, others argue the US must compete with China’s e-CNY. Instead, the Fed focuses on FedNow, its instant payment system launched in July 2023.

Igor comments: “The US proves that tech isn’t the bottleneck. Project Hamilton showed speed is possible. But politics and public trust move slower than software.”

Latin America

Several Latin American countries see CBDCs as tools for inclusion.

• Brazil is piloting the digital real, with initial tests focused on wholesale payments and tokenized assets.
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• The Bahamas launched the Sand Dollar in 2020, making it one of the first fully operational CBDCs in the world. It’s already accepted through licensed wallets across the islands.

These examples highlight how smaller economies use digital currencies to reduce costs and broaden access.

Africa

Nigeria’s eNaira launched in 2021 but has struggled. Many citizens complained about the clunky onboarding and the few reasons to use it instead of cash. Despite government pushes, uptake has stayed low.

In contrast, South Africa is part of Project Dunbar, along with Singapore, Australia, and Malaysia. Early pilots tested cross-border CBDC payments directly between central banks, cutting settlement times from days to seconds.

Igor reflects: “Africa is a reminder that adoption isn’t just about launching an app. If people don’t trust or need it, they stick with cash. CBDCs need clear benefits, not just government backing.”

Cross-Border Projects

The BIS mBridge project may be the most important CBDC experiment yet. In a six-week pilot in 2022, 20 commercial banks across China, Hong Kong, Thailand, and the UAE processed 160+ transactions, totaling over US$22 million, including US$12 million issued as CBDC.

The transactions included FX and trade settlements, showing that CBDCs could speed up cross-border flows and cut costs compared to traditional correspondent banking.

Igor puts it simply: “Cross-border is where blockchain can really shine. Domestic payments already work well in many countries. But moving value between banks in different jurisdictions is slow and expensive. If CBDCs solve that, they’ll have a global impact.”

Why do These CBDC Projects Struggle?

Even with progress, recurring issues remain:

• Privacy vs. control. Citizens want cash-like anonymity, governments demand traceability.

• Performance. Blockchains must process tens of thousands of transactions per second reliably.

• Integration. CBDCs must work in conjunction with banks, payment apps, and card networks.

• Trust. People must believe these systems won’t be used for surveillance.

These hurdles require more than pilots. They need structured testing, regulatory dialogue, and proper product discovery services to anticipate adoption challenges before rolling out at scale.

A Quiet but Steady Shift

CBDCs don’t dominate headlines like Bitcoin or NFTs, but central banks continue to advance. Some pilots scale, others stall, but the trend is clear: digital money issued by states is no longer hypothetical.

Igor concludes: “CBDCs won’t replace cash or crypto overnight. But every pilot leaves a trace. The question now isn’t if central banks will issue digital currencies — it’s how, and on what terms.”