Former Binance CEO and founder Changpeng “CZ” Zhao has called Central Bank Digital Currencies (CBDCs) “outdated” amid the rapid rise of stablecoins. But what’s happening with CBDCs, and why are they losing momentum?
During his keynote at the WebX conference in Tokyo on August 25, CZ discussed how governments around the world are shifting their approach to digital currencies, particularly stablecoins.
He highlighted a growing trend of regulatory support for fiat-backed stablecoins, citing examples such as Hong Kong’s Stablecoin Ordinance and the GENIUS Act in the United States.
According to Zhao, CBDCs are now falling behind, losing relevance in comparison to their faster-moving counterpart. “Central Bank Digital Currencies are already outdated. In contrast, stablecoins are gaining more attention,” he said.
The stablecoin sector is poised for substantial growth. Earlier this year, Standard Chartered projected its value could surge to $2 trillion, up from the current estimate of around $260 billion.
CZ’s Perspective on Stablecoins Versus CBDCs
During his session, CZ highlighted the advantages of stablecoins over central bank digital currencies (CBDCs). He argued that stablecoins are more likely to gain widespread market acceptance because they are backed by “real collateral and support.”
He also noted that even countries historically resistant to digital currencies are beginning to soften their stance as stablecoins gain dominance. Notably, China is reportedly exploring a yuan-backed stablecoin to counter the influence of USD-pegged stablecoins. Despite having banned crypto trading and mining since 2021, Chinese officials have tasked experts with examining digital currencies and assessing the feasibility of policy changes.
CZ contrasted this with CBDC initiatives, pointing out that some countries began experimenting with digital currency projects as early as 2013–2014 and continued into the 2020s. However, many of these projects faded into obscurity following the explosive growth of stablecoins.
He attributed CBDCs’ struggles primarily to a lack of demand, noting that only a handful have progressed to the adoption stage, such as the Bahamas’ Sand Dollar, Nigeria’s eNaira, and Ghana’s e-Cedi.
Meanwhile, European Central Bank President Christine Lagarde confirmed that the bank plans to launch the digital Euro by October 2025, signaling continued interest in CBDCs despite their challenges.
How Many Countries Have Ditched Their CBDC Plans?
In recent years, at least 10 countries have abandoned efforts to develop central bank digital currencies (CBDCs), turning instead toward stablecoin adoption. In the U.S., the passage of the GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins Act) has further accelerated this shift.
Countries including Japan, Denmark, Finland, Singapore, South Korea, and the U.S. have announced pauses or the cancellation of their CBDC pilot projects. Many cited high costs, testing difficulties, and a lack of viable retail use cases as the main reasons for halting their programs.
Most recently, the Bank of England is reportedly considering shelving plans for a digital pound as global attention shifts toward stablecoins. While a final decision is still pending, banks have been encouraged to focus on “payment innovations that could deliver similar benefits” to consumers, such as tokenized deposits.
