Central Bank Digital Currencies (CBDCs): The Next Evolution of Money?

By: Eliza Bennet

The age of digital currencies is upon us, and while cryptocurrencies like Bitcoin and Ethereum have been making headlines, a new contender is surging: Central Bank Digital Currencies (CBDCs). CBDCs are digital currencies issued by a country's central bank, which, unlike cryptocurrencies, are regulated and have the same legal status as a country's traditional currency.

CBDCs have a host of potential benefits. They could enable faster and cheaper transactions, increase financial accessibility, and give central banks more control over monetary policy. However, they also bring with them several risks such as data privacy concerns and the possibility of exacerbating financial instability if not managed properly. CBDCs are still in early development stages in most countries, with China and Sweden being the exceptions. Both are running pilot projects involving CBDCs for retail use.

For more details, follow this link to the Bank of International Settlements: https://www.bis.org/topics/cbdc.htm