The future of digital currencies: two approaches

Nowadays, about 28 countries around the world are developing legal regulation for central bank digital currencies (CBDCs). A CBDC represents a new form of national currencies that can be settled automatically (e.g., in the form of smart contracts) or as conventional money, but on the platform of central banks rather than commercial banks or payment services. Countries are at different stages of preparation for the implementation of CBDC: the EU is still only modeling CBDC payments, South Korea is testing real transactions but maintains investment limits and prohibitions.

At the same time, the US has a different approach: it introduces a prohibition on the introduction and promotion of CBDCs in favor of the development of settlements in private stablecoins.

Thus, there are two trends: on the one hand, testing and expanding the functionality of CBDCs and their use both for retail purchases and for targeted transfers to citizens from the state, on the other hand, banning CBDCs and allowing settlements in other regulated types of crypto-assets (e.g., stablecoins).

The EU experience

In May 2025, the European Central Bank (ECB) announced the launch of the Digital Euro¹ Innovation Platform, a virtual model of the future digital euro ecosystem. Around 70 participants have joined the platform. The platform is divided into two tracks:

− “Pioneers” test the technical feasibility of conditional payments (e.g. automatic payment upon confirmation of delivery of goods).

− “Visionaries” explore long-range scenarios - offline device-to-device payments and citizens without a bank account opening wallets at post offices.²

The ECB provides a unified API on said platform, simulates the central bank's³ settlement position and collects telemetry to evaluate the performance and privacy of the system.

The experience of South Korea

In 2025, the Bank of Korea launched the Hangang Project: 7 major banks will convert customer deposits into “deposit tokens” (blockchain-based representations of deposits) and conduct interbank settlements via the digital⁴ won. Since May, the pilot project has entered a live-transaction phase, testing whether tokenized deposits can reduce costs and accelerate settlements in the national payment system. The model assumes that currency is stored as tokens in the central bank's blockchain system

The US experience

In January 2025, a ban was introduced to prohibit federal agencies from taking action to⁵ create or promote CBDCs. In February 2025, the “No CBDC Act” bill was introduced to prohibit the Fed from issuing CBDCs, opening wallets to citizens, and holding CBDCs on its balance⁶ sheet. Proponents argue that the existing FedNow instant payment system (similar to the⁷ Russia’s FPS ) already meets real-time settlement needs for users, while CBDCs could undermine private banks and increase⁸ cybersecurity risks.

At the same time, in May 2025, the US approved a bill on “payment stablecoins” - digital⁹ dollar-tokens (GENIUS Act). The bill assumes at the federal level regulation of private stablecoins. Thus, the US adopts the approach of prohibiting the development and promotion of digital currency in favor of the introduction of private stablecoins as a means of payment on a par with the dollar.

Russia’s experience

In Russia, the pilot project with digital rubles commenced in August 2023: 13 banks opened wallets for clients on the Bank of Russia's platform, transfers and simple smart¹⁰ contracts were tested. By September 2024, the program covered 9,000 citizens and 1,200 companies; dynamic QR code payments and¹¹ B2B transfers were added.

Legally, the digital ruble is recognized as the third form of national currency (alongside cash and non-cash rubles), with rules established for handling digital rubles in bankruptcy procedures, currency control, inheritance and enforcement proceedings. Notably, Russia does not allow investing digital rubles, opening deposits, or issuing loans in digital rubles. Although this state of affairs reduces the possibility of using the digital ruble as a full analog of other forms of Russian currency, it also simplifies the Central Bank's task of maintaining it.

From the monitoring issue No. 5 (17), May 2025. Download the full issue (PDF) · issue page at the Gaidar Institute