What are central bank digital currencies (CBDC)?
CBDC and central banks
CBDC and governments
CBDC and individual
Money is central to our lives but is still something very abstract. From a consumer’s perspective,
over the centuries it has evolved from touchable objects (coins and, later, banknotes) to a
gradually more “touchless” system – via credit cards or, increasingly, smart phones. The
coronavirus crisis has speeded up this process of evolution, at least as regards the willingness
of consumers to use electronic payments – especially in those countries where previously there
was some reluctance. At the same time, modern technologies such as block chain (previously
associated with privately-managed cryptocurrencies) allow for new ways of payment.
The next level of abstraction, in the form of central bank digital currencies (CBDC), may soon be
upon us. CBDC will present multiple challenges to consumers and financial institutions, central
banks and governments as well as opportunities. It could be disruptive both for the banking sector
and the practicalities of central bank policy. If implemented, CBDC could change the world we live