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The Digital Economy’s New Monetary Imperative
Central bank digital currencies are usually touted as a tool for improving cross-country payment systems, fostering financial inclusion, or providing a substitute for diminishing cash. But as important as these benefits may be, they are secondary to the indispensable role CBDCs could play in preserving monetary sovereignty.
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LONDON – In recent years, central bank digital currencies (CBDCs) have become an increasingly hot topic for debate among economists, regulators, and financial and business commentators. But the primary case for the technology is not economic or financial; it is political. In a rapidly digitalizing world, central banks are staring down a future in which they may lack the tools necessary to manage crises, and in which they may no longer be able to protect their monetary sovereignty.