CENTRAL BANK DIGITAL CURRENCIES: AN OVERVIEW

Global finance is undergoing major technological transformations. One such transformation is Central Bank Digital Currencies. CBDCs stand to fundamentally reshape the way individuals, firms, and governments conduct financial transactions and monetary policy. The objective of this paper is to explore this complex and recent phenomenon in order to provide an introductory guide by analysing key benefits (e.g., financial inclusion, financial stability) and pitfalls (e.g., cybersecurity, mass surveillance) this technology may bring. Drawing across multiple active pilots and economic models, it concludes with evidence-backed recommendations for policymakers.