Chapter 19: Central Bank Digital Currencies: Opening Pandora’s Box or Paving the Future of Money?

This chapter reviews developments concerning central bank digital currencies (CBDCs). It introduces, analyzes, and discusses the potential implications of CBDCs on the existing cryptoassets landscape. The chapter also provides an overview of the different approaches to adopting and implementing this new form of money. Additionally, it compares traditional cryptocurrencies, privately issued stablecoins, fiat currencies, and CBDCs. Although vastly divergent opinions exist on digital money’s purpose, benefits, and use cases, CBDCs can provide opportunities for innovation and experimentation at a central bank and systemic level. CBDCs may pave the way for democratizing access to unbundled financial services while rethinking the overall purpose of money, monetary systems, and global business.