The Acceleration of Central Bank Digital Currency (CBDC) Competition: A Paradigm Shift in Global Financial Infrastructure by 2025
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Current Status of CBDC Development and Market Size
As of December 2025, the development of Central Bank Digital Currency (CBDC) is rapidly spreading worldwide. According to the latest report from the Bank for International Settlements (BIS), 114 countries globally are participating in CBDC research and development, more than tripling from 35 countries in 2020. Notably, 26 countries have entered the pilot phase, and 11 countries have completed actual launches. McKinsey & Company forecasts that the global CBDC market size will grow from $21.3 billion in 2025 to $213.4 billion by 2030, with an average annual growth rate of 58.7%.
China’s digital yuan (e-CNY) is currently regarded as the most advanced example of a CBDC. As of November 2025, the cumulative transaction volume has surpassed $2 trillion, with 260 million daily active users. The People’s Bank of China announced that the digital yuan accounts for 18% of all retail payments. This is a significant increase from 12% in December 2024, demonstrating the rapid spread of digital currency’s practicality. In major cities like Beijing, Shanghai, and Shenzhen, the acceptance rate of the digital yuan has exceeded 30%, marking the full-fledged effect of cash replacement.
The European Central Bank’s (ECB) digital euro project is also making significant progress. In October 2025, the ECB announced the completion of the technical design for the digital euro, aiming for a launch in the first half of 2026. In a pilot test conducted across the 27 EU countries, the digital euro demonstrated the capability to process 40,000 transactions per second, which is 15 times faster than existing card payment systems. The ECB estimates that the digital euro could reduce annual payment costs by €24 billion.
The Bank of Korea is also achieving noteworthy results in CBDC development. In the third phase of the pilot test that began in September 2025, the Korean CBDC stably processed 1 million transactions daily. Samsung SDS (based in Seoul) built the core infrastructure, while LG CNS (based in Seoul) handled the security system. The Bank of Korea plans to decide on commercialization by the end of 2026, having announced that the pilot operation confirmed a 70% reduction in transaction fees compared to existing electronic payments.
Technological Infrastructure and Blockchain Platform Competition
The most critical factor in CBDC development is blockchain technology that simultaneously satisfies scalability and security. Currently, countries are adopting different technical approaches, leading to intense competition over global technology standards. China’s digital yuan is based on a self-developed distributed ledger technology, capable of processing 300,000 transactions per second. This performance is overwhelming compared to Bitcoin’s 7 TPS and Ethereum’s 15 TPS.
The U.S. Federal Reserve has adopted a hybrid architecture in ‘Project Hamilton,’ developed jointly with MIT. This method combines centralized processing with distributed ledger technology, capable of processing 1.7 million transactions per second, with an average latency of just 5 milliseconds. As of December 2025, the Fed’s technical preparations are complete, but policy decisions have been postponed until after 2026. IBM (based in New York) and Microsoft (based in Washington) are participating as key technology partners.
The Bank of Japan is attempting a unique approach in collaboration with Sony and NTT Data. They are developing a CBDC system specialized for offline payment functions, utilizing NFC technology to enable transactions without internet connectivity. In a pilot test conducted in November 2025, a 99.8% offline transaction success rate was recorded. This is considered an innovative approach tailored to Japan’s unique environment, where natural disasters are frequent.
The Monetary Authority of Singapore (MAS) has embarked on CBDC development based on JP Morgan’s JPM Coin technology. Named ‘Project Orchid,’ this project is specialized for cross-border payments, achieving a 95% reduction in transaction time compared to the SWIFT network. MAS announced plans to launch a cross-border CBDC payment system with Malaysia and Thailand in the first half of 2026.
The competition over technological standardization is also fierce. Securing interoperability based on the ISO 20022 messaging standard has emerged as a key challenge. The Bank for International Settlements is conducting interoperability tests among the CBDCs of Hong Kong, Thailand, the UAE, and China through the mBridge project. In the October 2025 test, real-time transactions among the four countries were successfully completed, confirming a 50% cost reduction compared to traditional correspondent banking.
Response Strategies of Financial Institutions and Technology Companies
The introduction of CBDCs is bringing fundamental changes to the existing financial ecosystem. Commercial banks are facing direct competition with central banks and are seeking new business models. JP Morgan Chase established a dedicated CBDC department in the first half of 2025 and launched a CBDC-linked service for corporate clients through its blockchain-based service platform ‘Onyx.’ The transaction volume through this platform has surpassed $50 billion monthly, achieving a 60% reduction in fees compared to traditional wire transfers.
Goldman Sachs is expanding its digital asset management services in preparation for the CBDC era. The ‘Digital Wallet Service,’ launched in September 2025, is a solution that can manage CBDCs, existing fiat currencies, and cryptocurrencies in an integrated manner. Within three months of launch, it secured 100,000 customers, with assets under management reaching $5 billion. Particularly, corporate clients’ liquidity management efficiency improved by 25%.
Fintech companies are focusing on developing innovative services utilizing CBDCs. PayPal integrated CBDC functionality into its existing digital wallet while participating in the U.S. CBDC pilot program in the second half of 2025. In beta testing, the average processing time for CBDC transactions was 2 seconds, a groundbreaking reduction compared to the 1-3 days of traditional ACH payments. Square (now Block) developed a CBDC payment solution for small businesses, achieving an 80% reduction in transaction fees compared to existing card payments.
Korean financial institutions are also actively responding. Shinhan Bank, in collaboration with SK Telecom (based in Seoul), developed a 5G-based CBDC payment service. Launched in November 2025, this service significantly enhanced security by combining biometric authentication and AI-based fraud detection features. In the pilot test, the fraud detection rate was 99.2%, and the false positive rate was reduced by 70% compared to existing systems. KB Kookmin Bank, together with Samsung SDS, built a CBDC-based trade finance platform, reducing the letter of credit issuance time from 7 days to 1 day.
The competition among global technology companies to build CBDC infrastructure is also intense. Amazon Web Services launched the ‘AWS CBDC Suite,’ a cloud infrastructure dedicated to CBDCs, currently utilized by central banks in 15 countries. Microsoft provides CBDC development tools through its Azure blockchain service, adopted by 30 countries as of the end of 2025. Google Cloud is attempting differentiation by developing CBDC services specialized in AI-based fraud detection and compliance solutions.
The impact of CBDC adoption on financial markets extends beyond merely changing payment methods. The International Monetary Fund (IMF) announced that CBDCs are expected to enhance the stability of the global financial system and improve financial inclusion. Particularly, it is anticipated that 1.7 billion unbanked people in developing countries will gain access to financial services through CBDCs. The World Bank estimates that CBDC adoption could reduce global remittance costs by $30 billion annually.
However, the introduction of CBDCs also presents several challenges. Concerns about privacy and government surveillance persist, and there is a potential weakening of financial intermediation due to deposit outflows from commercial banks. The European Central Bank announced measures to address these concerns by limiting individual digital euro holdings to €3,000 and ensuring complete anonymity for offline transactions. The U.S. Federal Reserve has also prioritized privacy protection in CBDC design, considering an anonymous transaction system using zero-knowledge proof technology.
As of the end of 2025, CBDCs are transitioning from experimental stages to becoming a core infrastructure of the actual financial system. The competition among countries for CBDC development is not merely about the adoption of digital currency but also a strategic competition over the leadership of future financial systems. Countries and companies with technological superiority are increasingly likely to set new standards for global financial infrastructure, which is expected to be a crucial turning point determining the landscape of the financial industry over the next decade.
*This content is provided for informational purposes only and is not an investment solicitation or advice. Investment decisions should be made at one’s own discretion and responsibility.*
