There are currently some 134 nations and currency unions that have explored or are exploring the use of CBDC, of which three have already launched: Jamaica, Bahamas, and Nigeria.

These nations and currency unions have different yet sometimes overlapping motives for wanting to explore the option of digitizing their money, and they may not always be in the public's best interest.

On the positive side, however, many governments seek to strengthen financial inclusion by providing unbanked individuals with an accessible digital payment option while enabling easy transfer of funds, such as welfare payments, for example. They do so in the hope of reducing reliance on banks to handle transactions, enabling ordinary people to send remittances easily and affordably, and allowing for streamlined international trade.

Additionally, exploring CBDCs can enhance economic transparency due to blockchain's immutability, which would combat laundering, tax evasion, and other financial crimes. CBDCs would also promote the further expansion of the fintech sector by future-proofing the economy and encouraging advanced financial innovation.

Ethiopia, Africa's second-largest nation and fifth-biggest economy, has made headlines following the approval of an updated monetary policy framework by the National Bank of Ethiopia that, among other things, includes a plan for a CBDC. Economists believe this move would be a major boost for financial inclusion and efficiency in a country once seen as a growing economic power before a recent civil war disrupted momentum.

As the country rebuilds after the 2022 peace agreement, the NBE sees an opportunity to liberalize the economy and attract foreign investments. Ethiopia hopes to reform its economy, and much of its success may depend on how it implements a CBDC.

CBDCs can undoubtedly unlock economic advantages that could help developing and underdeveloped countries improve their financial standing while playing a larger role on the global stage. However, whether a specific CBDC is for retail, wholesale, or a hybrid, the development of these digital currencies can enable governments to assert more control over financial systems.

From a crypto perspective, if CBDC adoption becomes the norm, it could disrupt the blossoming decentralized finance space. For one, CBDCs could threaten privately issued stablecoins, which serve an infrastructural role, facilitating DeFi activity.