Part 1 of this series used the CBDCTracker.org database to show that retail central bank digital currency (CBDC) projects are fizzling out, and Part 2 discussed potential reasons why. In some cases, the projects have been mismanaged, but more pervasively, retail CBDCs seem to be redundant digital payment instruments, particularly versus fast payment systems (FPSs).
And although, Bindseil (2026) makes a case for retail CBDCs versus FPSs from a Euro Area policy goal perspective, many of the goals may not resonate strongly with potential users, especially in other jurisdictions (Table 1). For example, does the average user really care about strategic autonomy, monetary sovereignty, and the “anchor” role of central bank money. Plus, deference to financial integrity considerations results in the offering of only “adequate” privacy, while physical cash and crypto-assets provide complete privacy.
| Table 1: Bindseil (2026) Retail CBDC Policy Goals[1] | |
| Bindseil (2026) CBDC Policy Goals | Retail CBDC v FPS Score (Bindseil, 2026) |
| Reduce merchant fees and limit payment service provider (PSP) market power | 100% v 100% |
| Preserve strategic autonomy and monetary sovereignty | 100% v 66% |
| Add technical resilience through settlement/front-end redundancy | 100% v 33% |
| Public good and social objectives (financial inclusion and adequate privacy) | 100% v 33% |
| Preserve the “anchor” role of central bank money in retail payments | 100% v 0% |
However, I remain keen on what Chris Ostrowski and I call “test and deploy” digital currency, and the Monetary Authority of Singapore calls “purpose-bound money”. Both aim at narrow use cases and allow for abbreviated project management cycles because the risks of large-scale (“death star”) retail CBDCs are absent. The National Bank of Kazakhstan has successfully launched purpose-bound RCBDCs using them for public finance targeted payments, conditional transfers and automated compliance scenarios. And recent examples of such pilots by other central banks include:
- Hungary’s Magyar Nemzeti Bank issuing RCBDC to unbanked young people.
- The Reserve Bank of Australia testing 16 use cases, many of which leverage programmable payments to facilitate multi-party, conditional or escrowed payments, or to enable atomic settlement of transactions in tokenized assets.
- The Hong Kong Monetary Authority conducting 14 pilots that tested programmability, tokenization, and atomic settlement.
- The Reserve Bank of India piloting programmable retail CBDC use cases, including targeted government subsidies, agricultural credit, and corporate allowances.
None of this is to say that a “death star” retail CBDC will not be a success somewhere. I can think of several niche cases. One could be overcoming “cross-border” banking sector frictions in the Euro Area. Another could be in jurisdictions where a remunerated retail CBDC could “crowd in” oligopolistic banks that are abusing their market power to suppress deposit rates. I’ll expand on this idea in a future post in this series.
Another special use case is the provision of digital payments when/where connectivity is absent. Several retail CBDC projects have tested stored-value card and device-to-device payment methods that allow for transactions in such cases (IMF, 2025). Private payment service providers seem reluctant to offer such services, so maybe that’s a market failure that calls for retail CBDC intervention?
Lastly, central banks could consider more aggressively pushing the privacy boundaries set by the Financial Action Task Force (FATF) and other privacy-intrusive regulations. However, this is unlikely for advanced economy central banks and their governments that architected and impose these privacy-invading and financial control tools. And it is just as unlikely for emerging and developing market economy jurisdictions that have to stay compliant to be participants in international commerce and finance. And that finishes my three-part tour of the retail CBDC landscape as it stands today.
[1] Bindseil’s scores are based on a benchmark “fully-effective and well-designed” CBDC that hits all of his five policy goals, and on a low-cost FPS run by the central bank and imposed on all banks and merchants.
FYI I produce a monthly digest of digital fiat currency (DFC) developments exclusively for the official sector (e.g., central banks, ministries of finance and international financial institution (e.g., the BIS, IMF, OECD, World Bank)) plus academics and firms that are active in the DFC space (commercial banks, technology providers, consultants, etc.). (DFCs include central bank digital currency (CBDC), stablecoins and tokenized deposits.) It goes out via email on the first business day of every month, and if you’re interested in being on the mailing list, please email me at john@kiffmeister.com.
