Beware the hype over central bank digital currencies

We are at the peak of the hype cycle for central bank digital currencies, now being touted as one of the most fundamental innovations in the history of central banking. It is time for central banks and governments to be honest with unenthused populations. CBDC can’t deliver all the many promised improvements. As we come to design choices, there will be trade-offs. We might get improved payments but less credit. We could see greater financial inclusion but will lose privacy. Are the few benefits really worth the risk of disrupting the financial system?

A great series of experiments with money is running in the UK across eight locations.

These include: Botton Village in the North Yorkshire Moors, managed by a charity that supports people with learning and other difficulties; Burslem, near Stoke-on-Trent, which in 2018 became the first town in the UK of over 20,000 people without a single bank branch or ATM on its high street; and Cambuslang in South Lanarkshire, which saw its last three banks close in quick succession that same year.

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