Digital money has been around for over a decade, yet most people think that isn’t necessarily the case. Roughly half of all real-world transactions take place in digital form. Even if one pays with a credit or debit card, the associated money ledgers update digitally. The only exceptions are actual cash transactions, which have become a lot rarer in most parts of the world.
Switching to a digital currency, or a CBDC, is a logical step in evolution. It can help overcome negative interest rates, for example. Dealing with negative rates has become the new normal in most countries in recent years. Keeping funds in a savings account won’t yield any money, which is why alternative assets tend to thrive.
Last but not least, a CBDC makes it easier for banks to inject helicopter money. Currently, the printing of cash requires approval from the overarching central bank. Doing so costs money and resources. If a digital currency is created for Europe, it takes a few mouse clicks to achieve the same goal.