Understanding future of central bank digital currency uses and preparing for change
By Aleksi Grym, Head of Fintech and Principal Adviser, Bank of Finland
Can you provide insight into what you see as the future of central bank digital currency?
Central bank digital currencies are being developed all around the world, but they may end up looking rather different depending on country. In the end it comes down to what problem each particular country or currency area is trying to solve with their CBDC project.
For smaller developing economies, the key objective is often to improve financial inclusion and to offer easy-to-use and low-cost digital payment services that haven’t previously been widely available. For large, developed economies, on the other hand, the policy goal may be to improve the resilience of the digital economy by adding an additional payment rail or to consolidate a fragmented payment market.
But it may also be that some countries decide not to move ahead with implementing a central bank digital currency. If the payment market is working well and good solutions are already on the market, there may not be a strong case for a central bank digital currency.
Nevertheless, most central banks are working on central bank digital currencies in one way or another, and it is likely that we will see several implementations in the next few years. It will make the overall retail payment landscape more diverse and can offer new alternatives to the many payment services already on the market.