European economists Thomas Hass and Peter Bofinger suggest that the national digital currencies are not needed by economies. They noted that central bank currencies will not be able to compete with private banks.
Several countries experimenting with CBDC
China is among the world’s premier economies experimenting with digital currencies, which will provide digital versions of their national currencies. The European Central Bank is also mulling the possibility of a digital euro. Central banks of other countries are also actively researching the use of digital currencies in their payments ecosystem.
The researchers argue in their paper that the race to creating a substitute for digital cash risks failure and lacks an “obvious justification.” Both Hass and Bofinger published their paper with European policy analysis publication VoxEU and said that the central banks have been focusing on CBDCs as a medium of exchange. The duo is associated with the Economics department at the University of Wuerzburg in Germany.
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