Central Bank Digital Currencies: The Motivation

A growing number of central banks are considering the issuance bank digital currencies (CBDCs). CBDCs for general public (“retail CBDCs”) would constitute a liability and form cash. To public, they be an alternative to issued cash private money, such as traditional deposits. The evolution payments plays pivotal role in developing CBDCs. Given declining some jurisdictions, new money may contribute safeguarding trust currency improve financial inclusion outcomes. have potential encourage competition efficiency otherwise oligopolistic market payment services, increasingly dominated by BigTechs, increase overall resilience markets future. Upon their introduction depending on exact design, considerable consequences policy makers public. This chapter sets out four main motivations issuing CBDCs, all while acknowledging divergences across jurisdictions.