Central banks increasingly frame Central Bank Digital Currencies (CBDCs) as upgrades to today’s payment systems, promising faster settlement, lower costs, greater efficiency, and a more trustworthy monetary infrastructure.
They also increasingly describe retail CBDCs as “digital cash,” even though cash’s defining feature, true transactional privacy, cannot be replicated in a permissioned, identity-linked system.
Once you look under the hood, a different reality emerges: CBDCs have the potential to introduce structural risks to privacy, expand the surveillance and control capabilities of states, and create new levers of power for central banks and global institutions.
As CBDCs move from exploration to pilots and legislation in 2026, three trends illustrate where things are truly heading.
1. CBDC Expansion Is Accelerating
Global momentum continues to rise. The Human Rights Foundation’s CBDC Tracker reports more than 139 governments are now developing or assessing CBDCs, up from fewer than 40 in 2020. Many are moving from research into system design, testing, and legal frameworks.
This direction was reinforced two months ago during the IMF’s Future of Finance panel. Managing Director Kristalina Georgieva urged policymakers to “accept reality — fiat money is moving digital,” noting that crypto, tokenization, and digital payments are evolving at “exponential speed.”
The IMF did not prescribe a CBDC mandate but stressed the need to assess risks such as fragmentation and currency substitution, and prepare appropriate regulatory frameworks.
The 2024 OMFIF survey adds data to this trend: 72% of central banks now expect to issue a CBDC, 34% foresee issuance within five years, and 91% have conducted or plan feasibility studies.
Combined with the Bank of International Settlements (BIS) guidance on unified, identity-linked infrastructures, a global policy arc is emerging toward permissioned, regulator-visible digital money systems.
Change in banks’ stance on CBDCs
Countries across regions are responding. Israel’s Digital Shekel, now nearing a full design proposal with intermediated wallets and offline use, is slated for an official launch recommendation by the end of 2026. Israel’s central bank has said it is watching other jurisdictions closely, naming the European Central Bank (ECB) as its main reference point.
2. Digital ID Integration
A defining feature of next‑generation monetary systems is the merging of CBDCs with national digital identity frameworks. The BIS outlines how identity, compliance, and settlement layers can operate within a single programmable architecture. The ECB describes a similar structure for the Digital Euro, where identity service providers verify users and link wallets to credentials.
India’s e‑Rupee uses Aadhaar-based verification; Nigeria paired its eNaira rollout with a national digital‑ID expansion; Singapore’s MAS treats CBDC–ID interoperability as foundational (Project Orchid, 2022).
Human-rights organizations warn this creates unprecedented financial visibility. HRF notes that ID‑linked CBDCs centralize sensitive behavioral and transactional data, increasing the risks of surveillance or political misuse.
3. The Digital Euro’s Influence
In October 2025, the ECB completed its two-year preparation phase for the Digital Euro, publishing a draft rulebook and technical framework. Legislation is anticipated in 2026, with pilots said to begin in 2027.
Because the eurozone is one of the world’s largest monetary blocs, its design decisions — intermediated wallets, privacy thresholds, offline capability, identity-linked onboarding, and holding limits — are likely to shape global norms.
Many features resemble those already deployed in China’s digital yuan, the world’s most advanced CBDC, with over 800 million wallets and more than 10 trillion yuan in transactions. Recent EU–China financial coordination underscores Europe’s interest in China’s operational experience.
The Digital Euro also develops alongside broader EU financial reforms, including the emerging “Savings and Investments Union”, which aims to mobilize private capital and deepen financial integration, a backdrop that aligns with Europe’s monetary digitalization agenda.
What Awaits in 2026
CBDCs are moving from theory to implementation. The IMF is urging governments to prepare for a digital monetary future; OMFIF data shows rising issuance expectations; BIS guidance promotes unified, identity-linked architectures; and Europe’s Digital Euro is set to influence international standards.
The question for 2026 is no longer whether CBDCs are coming, but what limits, governance frameworks, and rights protections will define them.
