Policy-makers at a number of central banks around the world are seriously considering developing and issuing a central bank digital currency (CBDC), with a consumer-ready CBDC likely to arrive in the next five years
That is the key finding from a report from IBM and OMFIF, a central banking think tank.
The report, commissioned by IBM, encompasses an in-depth survey of officials from 23 central banks in advanced and emerging economies. The findings present a holistic picture of policy-makers' approaches to setting up a retail CBDC. The survey projects that the first CBDC will be produced within five years in a small economy and respond to a specific policy objective with a well-defined use.
A consumer-ready CBDC is likely to require some form of public-private partnership. Central banks are hampered in their ability to offer financial services, and private companies will probably fill the gap.
Without regulation, private sector digital currencies could possibly undermine central banks' monetary sovereignty and threaten financial stability. Central banking policy-makers and regulators increasingly acknowledge that understanding and, where appropriate, incorporating these technologies into their own functions may have to be an essential part of their mandate.
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