Three to five nations worldwide will entirely replace their fiat currency with a central bank digital currency, or CBDC, by 2030, a European think tank predicts.

Dutch fintech-focused non-profit think tank dGen released a report devoted to geopolitical trends of CBDCs on Sept. 9.

Titled “CBDCs: Geopolitical Ramifications of a Major Digital Currency,” the 30-page report takes a deep dive on the status of major global fiat currencies like the United States dollar, the euro, and China’s yuan. Compiled with support from institutions like the European Central Bank (ECB), Standard Chartered Bank, and the Frankfurt School, the report makes some big predictions on the impact of CBDCs on the global financial system.

As such, dGen predicts that three to five nations globally will completely replace their national currency with a CBDC in ten years. While dGen does not make an exact guess at which countries will make the switch by 2030, the report outlines significant progress in CBDC by jurisdictions like the Bahamas and Sweden. The think tank noted that Sweden’s e-krona development comes in line with the country’s plan to go cash-free by 2025.

Among other predictions, dGen forecasts that the euro will be overtaken by China’s digital yuan project if Europe does not develop its own CBDC by 2025. The think tank stressed the need for the ECB to establish a “suitable environment for the prosperity of the digital euro,” noting that otherwise the fiat currency is at risk of losing its position in the global economy.

Philipp Sandner, head of the Frankfurt School Blockchain Center, criticized the ECB for its apparent lack of action:

“The ECB’s reaction has been too slow. Especially, the benefits from a CBDC for the industry, e.g., based on programmable money, are currently neglected. Given Libra and the DC/EP [digital yuan], the ECB has to react quickly to keep its geopolitical position.”

While China’s CBDC poses a threat to the euro, the digital yuan is unlikely to overtake the U.S. dollar as the world’s reserve currency in the near future, the report notes. “Launching a digital yuan will not unseat the dollar — at least not immediately,” dGen wrote. According to the think tank, the digital yuan has low chances of beating the dollar due to “political unrest in China and the effort of shifting reserves and invoicing.”

Issued by a central bank, a CBDC is essentially the digital representation of fiat money, aiming to provide cashless transactions, speed up payments and reduce associated costs. While China is apparently the most active jurisdiction in terms of CBDC development, more countries are starting to aggressively explore the new financial tool. As such, Brazil’s central bank announced in early September that Brazilians could expect to see a CBDC before 2023.