The Promise and Peril of Central Bank Digital Currencies
With China and others venturing into a realm once inhabited by private cryptocurrencies, there will be increasing pressure on the United States, Europe, and others to follow. But before everyone rushes in, policymakers would do well to consider the foreseeable risks and how they should be managed.
WASHINGTON, DC – Bitcoin and other privately issued cryptocurrencies have generated a frenzy of excitement, with most of the analysis focused on their appeal and apparent drawbacks. But relatively less attention has been paid to an even more important development: the increasing likelihood that countries will shift partly or entirely to a central bank digital currency (CBDC).