MasterCard’s crypto and blockchain head, Raj Dhamodharan, predicts a change in how central banks approach digital currencies in 2025. He believes they’ll shift focus from consumer-facing digital currencies (retail CBDCs) to digital assets designed for banks and financial institutions (wholesale CBDCs).
A Change in Direction
Dhamodharan suggests this shift is partly due to President Trump’s executive order. This order discourages the creation of a US retail CBDC, citing potential threats to financial stability. He expects this trend to gain momentum in 2025, with more central banks prioritizing wholesale CBDCs.
Focus on Wholesale CBDCs
These wholesale CBDCs, targeted at banks and financial institutions, could significantly improve how institutions settle transactions and speed up cross-border capital movement. This contrasts with the earlier widespread expectation that most central banks would issue retail CBDCs for general public use.
A Shift from Previous Predictions
This prediction differs from last year’s World Economic Forum (WEF) report. The WEF projected that nearly all central banks (98%) were planning their own CBDCs, with a potential 24 live CBDCs by 2030. MasterCard’s forecast suggests a different path, with a greater emphasis on institutional-level digital assets.
