Civic Review· VOL 17. Special Issue, 2021, 124–140., DOI: 10.24307/psz.2021.0009
In the new digital age, the transformation of money is inevitable. Our study focuses on this challenge and the potential public policy response to it: the concept of central bank digital currency (CBDC). We briefly outline the historical development of money and the challenges posed by the current digital transformation for the financial system, especially in the area of monetary policy. In response to the Fintech and BigTech challenges and the potential 'digital' dollarisation of national currencies, the idea of a central bank digital currency is emerging as a growing and almost unanimous response among central banks. Implementation, however, involves a very complex set of decisions, fraught with design issues, challenges and risks. These decisions, in turn, need to be driven by general motives and the specific problems to be addressed. In the concluding part of our paper, we briefly look at where the introduction of central bank digital currency is most advanced in the world. Although we do not yet see the final full-scale introduction of CBDC in countries with significant economic weight, we have no doubt that the evolution of money will continue in this direction.
Journal of Economic Literature (JEL) codes: E52, E58, F02, N00, O30, P00
Keywords: central bank digital currency, CBDC, central bank, monetary policy, the future of money, payment system, finance, digitalisation, innovation