Central Bank Digital Currency

A cryptocurrency issued by the central bank of a currency. This would obviate the need for commercial bank deposits and money would just shuffle among this central bank ledger. The proposed benefits would be speed of transaction and the risk-free nature (no intermediary bank to collapse). This benefits are negligible since most transactions are already instantaneous and the FDIC backing reduces risk. The risks of CBDC are that the government gets much more control and can make rapid and targeted fiscal decisions. Additionally, privacy would be diminished as the government would have full knowledge of asset holdings and flows1.


Wang, J. J. Central Banking 101. (Joseph, 2021).

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