Central banks around the world are exploring, and in some cases even piloting, central bank digital currencies (CBDCs). More than 80% of central bank respondents to a Bank for International Settlements survey in 2019 reported engagement in CBDC projects (Boar et al. 2020). One in ten central banks, representing approximately one-fifth of the world’s population, expected to offer CBDCs within the next three years. The People’s Bank of China has begun to pilot a digital yuan, while the US and the ECB are exploring CBDC development (Zhao 2020, Bharathan 2020, Mersch 2020). At the same time, a Facebook-initiated fiat-backed cryptocurrency called Libra has raised the prospect of an industry alternative (Light et al. 2020). Various forms of CBDC have in a sense existed for years, but as wholesale facilities available exclusively to financial institutions. What is striking and potentially transformative about many recent CBDC initiatives is their retail focus (Ricks 2018). They aim to democratise central banking by making accounts or liabilities directly available to individual consumers, households, and/or businesses.
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