《金融與經(jīng)濟(jì)評論》：央行數(shù)字貨幣的興起 The Rise of Central Bank Digital Currencies

FinancialandEconomicReview,Vol.21Issue3,September2022,122–148.

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TheRiseofCentralBankDigitalCurrencies*

JánosMüller–ádámKerényi

Therevolutionaryriseofdigitalfinancialinnovationshasheraldedaneweraintheoperationofthebankingsystemandcentralbanks,whichhasbroughtaboutthedigitaltransformationofmoney.Centralbanksmustrespondtochallengesprofoundlyaffectingandtransformingthefinancialsystem.Centralbankshavebeenexploringtheintroductionofcentralbankdigitalcurrency(CBDC),inordertopromotestabilityandsustainabledevelopment,topreservecompetitivenessandtobolstertheeffectivenessoftheirmonetarypolicies.Inadditiontosmoothoperation,thepreservationofsovereigntyandtheeffectivenessofthemonetarypolicyalsoneedtobeensured.Alongwithitsexpectedadvantages,thepaperalsodiscussestherisksrelatingtoCBDC.CBDCappearsintheinternationalfinancialsystem,generatingcompetitionamongglobalcurrencies.Therivalrybetweenthedollar,theeuroandtheyuanmayalterpositionsintheglobalfinancialsystem.Arearrangementofinternationalpowerrelationsisatstake.Againstthisbackground,thepaperalsoprovidesinsightintoHungariannewsonpreparationsfortheintroductionofCBDC.

JournalofEconomicLiterature(JEL)codes:E3,E5,G1

Keywords:centralbankdigitalcurrency,meansofpayment,storeofvalue,cross-bordertransfers,financialstability

1.Introduction

Intherecentpast,digitaleconomicdevelopmenthasaffectednearlyallfacetsoflife,includingthefunctioningofthefinancialandbankingsystem.Digitalfinancialinnovationshavetransformedthepaymentsystem,asvariousformsofelectronicpaymentshavecontinuouslygainedground,andatthesametime,theuseofcashhasdeclined.Centralbanks–theinstitutionsinchargeofprotectinglegaltendersas

*ThepapersinthisissuecontaintheviewsoftheauthorswhicharenotnecessarilythesameastheofficialviewsoftheMagyarNemzetiBank.

JánosMüller,Economist,ChiefAdviser,HungarianBankingAssociation,ExecutiveDeputyDirectorintheBeltandRoadFinancialCooperationCommitteeofAsianFinancialCooperationAssociation(AFCA).Email:

mullerj1@t-online.hu

ádámKerényi,ResearchFellow,InstituteofWorldEconomics,ResearchCentreforEconomicsandRegionalStudies.Email:

kerenyi.adam@krtk.mta.hu

ádámKerényiisgratefulforthegrantfromtheNationalResearch,DevelopmentandInnovationOffice.ProjectNo.K128682wasfundedwithsupportfromtheNationalResearch,DevelopmentandInnovationFundandfinancedbytheK_18fundingscheme.

ThefirstversionoftheHungarianmanuscriptwasreceivedon14December2021.DOI:

/10.33893/FER.21.3.122

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theissuersofmoney–werealsoquicklyaffectedbythisrapiddevelopmentprocess(Adrian–Griffoli2019).Digitalfinancialservices,electronicpaymentinstruments,indeed,privatedigitalmoneys,posedachallengethatneededtobetackled.Thesolutionfoundbycentralbankswasthecreationandintroductionofthecentralbankdigitalcurrency(Dolan2021;Margulis–Rossi2021).

Inouranalysis,wefollowtheprocessofcentralbanks’workondigitalcurrencies(CBDC)thathasledfromsomeinitialtrialapplicationstomorethanhalfoftheworld’scentralbanksnowexploringtheconceptunderlyingtheintroductionofsuchapaymentinstrument,togetherwithitspotentialbenefits.

Toputitsimply,CBDCismostlikeadigitalbanknoteissuedbyacentralbank.Suchdigitalmoneydoesnot,inprinciple,differfromtraditionalmoneyorunitsofaccountconventionallyissuedbyacentralbank,backedbyitsreservesandthecountry’slegalsystemmakingsuchmoneyitslegaltender.Infact,itisadematerialisedcentralbankmoneyconstitutingareceivablefromthecentralbank,availableindigitalformforallusers.Inotherwords,aperson’soracompany’sreceivableformthecentralbanktakesonadigitalform,asanewformofmoney.

TheuseofCBDChassomeclearbenefitsbut,dependingonthewayitisimplemented,itmayinvolvesomerisks,andsomeelementsmayevenjeopardisefinancialandmonetarystability.Wewilldealinmoredetailwiththepositiveimpacts:atthispoint,weonlyhighlightthatCBDCcouldenhancecooperation,theefficiencyofthefinancialsystemandtradefinancingattheinternationallevel.Ontheonehand,thisopportunitycallsforinternationalcooperationontheintroductionofCBDCsandontheotherhand,itgeneratescompetitionamongCBDCsfunctioningaskeycurrencies,fordominanceovertheinternationalmarket.AnotherimportantroleofacentralbankdigitalcurrencyistoprovideprotectionagainstthechallengesposedbyBigTechcompaniesandprivatedigitalmoneysandtosafeguardthefinancialsovereigntyofthecountryconcerned.

First,wereviewthecurrentinternationalcentralbankdigitalcurrencylandscapeandthenanalysethesituationasregardstheintroductionofthedigitaldollar,theChinesecentralbankdigitalcurrencyandthedigitaleuro.ThelikelyimpactsoftheintroductionofcentralbankdigitalcurrencyshouldalsobeexploredfromaHungarianperspective,particularlybecausethismatterisalsorelevantinthenationalsphereofcompetence,asanEUMemberStatewhichisnotamemberoftheeuroarea.

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2.ProcessesnecessitatingtheintroductionofaCBDC

Thefourthindustrialrevolution,includingdigitalisation,hasbecomepartandparcelofdevelopmentoverthelasttwodecades.Digitalfinancialinnovationsfirstappearedinthefinancialmarketssurreptitiously,1butthentheirimpactandinfluencebecameexplosive,forcingincumbentbankstochangetheirbusinessmodelsandtransformingpaymentandmoneyusepracticesaswellasthehabitsofbanks’customers.

Whilethesedevelopmentsresultinnewchallengesforcentralbanksandincumbentbanks,therolestheyplayintheeconomystillremainessentiallyunchanged.Withtheacceleratingcompetitionininnovation,centralbankshadtosupportandregulatetheenterprisesdeployingfinancialinnovations,whileincumbentbankshadtostandtheirgroundinacompetitioninwhichtheyfounditdifficulttokeepupwithnewrivalsintermsofdigitaldevelopment.

Digitalfinancialservicestransformedthefinancialintermediarysystemtosuchanextentbytheendofthelastdecadethatallmarketparticipants,includingcentralbanks,financialregulators,incumbentbanksaswellFinTechandBigTechtypeserviceproviderscouldnotbutrealisethatthepenetrationandtransformativeimpactofdigitaldevelopmentshadbecomeunstoppable.2TheintroductionofCBDCswasalsodrivenby(i)cryptocurrencies,(ii)stablecoins,(iii)BigTechpaymentsystems,and(iv)digitalisationenforcedbythecoronaviruspandemic(Aueretal.2021).

Aformofmarketreferredtoasanamazonisedfinancialmarketplace3emergedinthefuturevisionofdevelopmentwiththeforerunnersofdigitalmoneysloomingonitshorizon.Bitcoinandstablecoinsenteredthescene,andFacebookannounceditsintenttointroduceadigitalmoneycalledLibra,towhichtheywantedtoassignaglobalrole.Theinternational–andsomenational–financialsystemsreachedamilestonewheninadditiontodigitalmoneysthefirstattemptsatthecreationofCBDCsweremade(Müller–Kerényi2021;Pistor2021).

ThefollowingisanoverviewofthesituationandrolesofCBDCstoday,withoutdiscussingFinTechcompanies’digitalcurrenciesorBigTechcompanies’electronicpaymentinstruments.

1Theideaofretailaccountskeptbycentralbanksisnotanewidea;theconceptofcashindepositappearedinprofessionalcirclesasearlyasinthelate1980s.

2Transformationofthefinancialsystemwasacceleratedbythedynamicallygrowingproportionofelectronicpaymentsandthedecreaseintheuseofcash.

3Anamazonisedfinancialmarketplaceisacustomer-orientedinterfaceonwhichretailandcorporatecustomerscanseekandfindtheproductsandservicestheyneed,withthemostfavourabletermsandconditions.SuchadigitalfinancialmarketplacemaycometobeadominantelementaffectingthedevelopmentofCBDCs(PWC-LfF2019).

TheRiseofCentralBankDigitalCurrencies

Centralbankshavebeenprovidingsocietiesandeconomieswithreliable,value-storingmoney,forhundredsofyears.Areliablemoneyisapublicgood.Itprovidesacommonunitofaccountandfunctionsasameansofexchangeforthesaleofgoodsandservicesandforthesettlementoffinancialtransactions.Theprovisionofpubliccashisanimportantinstrumentinthehandsofcentralbanks.

Initially,cashwasanessentiallypreciousmetal-basedcommoditymoneyincommodity-producingsocieties,whichwasgraduallyreplacedbypapermoney.4Eventhelatterhoweverwerebackedbyelementsdeterminingtheirvalue,suchas,forinstance,gold,andthesafeexistenceofvaluewasguaranteedbystates.Papermoneyshavesofarappearedexclusivelyintheformofbanknotes.Overtime,centralbanksandcommercialbanksgraduallyintroducedso-calledcreditmoneysbesidescommoditymoney.Forhundredsofyearsthesewereusedasmeansofpaymentandsavings;theirvaluewasguaranteedbycentralbanks,whetherintheformofcashorbankaccountmoney.Thewidevarietyofmonetarypolicyinstrumentsusedbycentralbanksincluded,forinstance,thequantityofmoney,itsvelocityandopenmarketoperations.

Inretrospect:agenerallyaccepted,stableandefficientlyfunctioningsystemevolvedoverdecadesininternationalfinancialandtraderelationships.GoldplayedakeyroleinthereservesofcentralbanksbeforeWorldWarII,whiletheBritishpoundwasthekeycurrencyofinternationaltrade.Afterthewar,theUSdollartookovertheroleoftheNo.1globalcurrencyundertheBrettonWoodsAgreement,buttheBritishpoundalsoremainedadominantcurrency.Theywere“joined”bytheJapaneseyensomewhatlater,andbytheeuroafewyearsago.Theemergenceoftheyenandthentheeurowerestillnotregardedasaseriouswarningsignofthepossibilityofanyprofoundchangetakingplaceintheglobalfinancialsystem.In2016,thefirstwarningsignalwastheappearanceoftheChineserenminbi(alsoknownastheyuan,orCNY)intheInternationalMonetaryFund’sSDR(SpecialDrawingRights)currencybasket,takingthethirdplaceafterthedollarandtheeurointermsofweightedaverages,overtakingtheJapaneseyenandtheBritishpound.

Thishistoricalbackgroundconfirmsthattheinstrumentforfinancingtheinternationalfinancialsystemandtraderelationshipsneedstobefound,andthedigitalcurrenciesofcentralbankshavetobecreated,madeacceptedandsecure,duringthenewdigitalage.TheintroductionofCBDCsposesanewchallengetothenationalandinternationalmonetarysystemsandtherolesandcompetitivepositionsofcentralbankmoneysremaintobeseenfornow.

4Papermoneyswere,however,alreadycreditmoneystoalargeextent(withsomeexceptions:banknotesissuedonthebasisofgolddeposits)becausetheywereissuedbybanksbydiscountingtradebills,orbycentralbanksbydiscountingbankers’bills.

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3.WhatisaCBDC?

Letustakeacloserlookatwhatacentralbankdigitalcurrencyactuallyis.Thereisnofully,generally,widelyaccepteddefinitionforwhatCBDCis,forthetimebeing.Acentralbankdigitalcurrencyisanofficialcurrencyissuedbyacentralbankinelectronicform,“universallyavailableandis,likecash,suitableforpeer-to-peertransactionswithoutcentralintermediary”(Bech–Garratt2017:56).

Inarecentstudy,seniorexpertsattheCentralBankofHungary(MagyarNemzetiBank,MNB)alsoappliedthedefinitionoftheBankforInternationalSettlements(BIS)(2020):“acentralbankdigitalcurrencyisadigitalformofcentralbankmoneythatisdifferentfrombalancesintraditionalreserveorsettlementaccounts.Itisadigitalpaymentinstrumentdenominatedinthedomesticcurrencyandadirectliabilityofthecentralbank”(Fáykiss–Szombati2021:104).

AccordingtoadiscussionpaperreleasedbytheBankofEngland,beingsystemicisanimportantfeatureofadigitalmoney.Thedefinitionofwhatsystemicis,however,stillneedstobeclarifiedinregardtosuchdigitalmoneys(BoE2021).

TheintroductionofCBDCwillhaveaprofoundimpactonusers,centralbanks,financialinstitutionsandtheinternationalmonetarysystem.Thiswilllargelydependontheconditionsdevelopinginconnectionwiththeintroductionandthemodelofthecentralmoney.Theveryname“centralbankdigitalcurrency”containstheconceptofmoney,i.e.itmustfulfilthefunctionsconventionallyfulfilledbymoney,soitmusthaveattributesrelatingtosettlement,paymentandvaluestoring.Sincecentralbankdigitalcurrencieshavesofarbeenissuedundernationaljurisdictions,theirstatusoflegaltenderisensuredbythelawsofthecountriesconcerned.

Dependingontheissuingcountry’slegislativeframework,CBDCsappearinthreebasictypes:oneisaccount,anotheristoken,thethirdishybridbased(Aueretal.2021).InparallelwiththeintroductionofaCBDC,thecentralbankconcerned,andtheincumbentbanks,equallyshouldbetaskedwithpreparingtheusers,primarilythelocalpopulationandwithdevelopingtheirdigitalawareness.

InChina,wherethemoneycalledeCNY(theabbreviationoftheelectronicChineseyuan,hereinafterreferredtoas“digitalyuan”),wasintendedtobeusedevenbeforethe2022WinterOlympics,thegovernmentandthecentralbanksetaboutassessingtheconditionsforintroductionanduseearlyon.ThePeople’sBankofChina(PBOC)distributestheyuansithasissuedamongthesixlargestcommercialbanksoperatingunderitscontrol,whichinturnmakethemoneyavailableforsmallerbanks,peopleandcompanies.AccordingtothePBOC’sanalysisthecommercialbanksalreadyhavetheinfrastructurerequiredforthespreadofthedigitalyuanandthusthecentralbankdoesnotneedtodevelopanewsystem.

TheRiseofCentralBankDigitalCurrencies

4.FactorsmotivatingandcallingfortheurgentintroductionofCBDC–Advantagesofacentralbankdigitalcurrency

Asaresultoftherapidspreadofdigitalfinancialinnovations,theuseofphysicalcashisquicklydecreasing,confirmingatthesametimethetransformationofpaymentandbankinghabits.Speed,i.e.effectingtransactionsimmediatelyandwithoutpresenceinperson,hascometobegenerallyrequired.ThiswaspromotedbytheCovid-19pandemicbythesuggestionthatphysicalcashcouldfunctionasacarrierofthevirusandthatcontactsinbanks’customerareasshouldbeavoided.However,theimpactofthepandemiccouldbeclearlyfeltinseveralareas(e.g.numberofcashpaymenttransactions,cashwithdrawalturnoverofcreditinstitutionsinthebranchesandthroughATMs,cash-in-transitcompanydata)(Deáketal.2020).Itshouldbenotedatthesametimethattransactionsactuallydiminished,butthepandemictriggeredasignificantincreaseinliquidformsofsavings,includingsavingsincash,andnotonlyinHungary(Végs?–Bódi-Schubert2020).Theappearanceofcentralbankdigitalcurrencyisatleastasprofoundachangeaswastheintroductionofpapermoney,thatis,banknotes,aswellasmetalcoins.

Competitionintensifiedthroughtheincreasingmarketpenetrationofdigitalfinancialservices,triggeringurgentstepsattwolevels.Firstofall,agrowingdemandforimprovingefficiencyandspeed,andforreductionsofcostsandthusservicefees,appearedinthenationalmoneyandbankingmarkets,andtheneedformeetingtheserequirementsbecameamotorforinnovation.FinTechandBigTechcompaniesusingdigitalfinancialinnovationsappearedinandconqueredthemarketsoquicklyanddramaticallythatinmostcasesitjeopardisedfinancialstabilityandtheeffectivenessofmonetarypoliciesintheabsenceofadequatenationalandinternationalregulations,creatingsituationsthatneededtoberespondedto.

Thenominalvalueofacentralbankdigitalcurrencyisguaranteed,andreliabilityisoneofthekeybenefitsofitsintroduction.Ontheotherhand,digitalprivatemoneysareexposedtooperating,credit,liquidityandmarketrisksandtheirreliabilityandconvertibilitymustbeensuredbyexternalinstitutionsandregulators.

AnothermajorbenefitoftheintroductionofCBDCisthatitcanbeanefficientinstrumentforwhiteningthegreyeconomyandfightingmoneylaundering.This,however,greatlydependsonwhetherthemodelofitsintroductiondoesordoesnotguaranteetheanonymityofuse.

Anotherimportantelementofitsintroductionisadefencefunctionoftwokeycomponents:ontheonehand,protectionfromtherisksposedtothefinancialmarketandthemonetarypolicybyBigTechcompaniesandcryptocurrencies,andtheprotectionofsovereigntyatanationallevel,or–inthecaseoftheEuropeanUnion–evenattheEUlevel.Anotheradvantageforcentralbanksduringthe

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introductionofCBDCisthattheycancloselymonitorthequantityofmoneyincirculation,thedemandforitanditscirculationvelocity.

Thesefactorsaresupplementedbyconsiderationsofsustainabilityandenvironmentalprotection,asbothprintingpapermoneyormintingcoinsrequiretheuseofmanyharmfulmaterialsandtheirstorage,shippingandprotectionareexpensive.This,however,doesnotmeanthattheintroductionandoperationofaCBDChasnocosts;indeed,surveysconductedbytheEuropeanCentralBank(ECB)andothercentralbankshavefoundthatacentralbankdigitalcurrencyandphysicalcashneedtocoexistinthefinancialmarketsidebysideforalongtime.

Theoverwhelmingmajorityofcentralbanksarescrutinisingthepossibilitiesandways,aswellastimingofintroducingCBDCs.Thevariousparticipantshavedifferentmotivationsandfactorsencouragingorurgingthis.Forexample,oneofthePeople’sBankofChina’sobjectiveistoboostcompetitionandeliminatecertainsystemicrisksstemmingfrommuchofthepaymenttransactionsbeingcontrolledbyAlipayandWeChatPay.Bytakingsuchasteptheywill,atthesametime,enhancethestabilityofthefinancialsystem.

Somecentralbankshavefoundthemselvesinasituationwheretheyareforcedtotakeaction,astheefficiencyandeffectivenessoftheirmonetarypoliciesarethreatenedbycryptoinstrumentssuchasBitcoin,theabove-mentionedLibra–launchedbyFacebook–orcurrenciesandprivatedigitalmoneysofotherBigTechcompanies.Atthesametime,centralbanksarerisk-freeguardsofvalue,andassuchhaveacomparativeadvantageovertheaboveissuersofotherdigitalorcryptoinstruments,inwhichregardtheyarethusinamonopolisticposition.

“Availability”isanothermotivatingfactorsincewiththeintroductionofCBDCavarietyofinnovativefinancialservicesmakequickandefficientpaymentsandbankingtransactionspossibleincertaincountriesorinsomeunder-bankedpartsoftheworld.AccessibilityandavailabilityboostinnovationinthebankingsysteminthatthetechnologyandfunctionalityoftheexperimentalnatureofCBDCenablestheuseofsmartcontractsandcanhelpreducetheamountofcashincirculation.

Thus,accordingtoanalysesandtrialapplicationstodate,theintroductionofCBDCcanofferavarietyofbenefits,someofthemostimportantonesofwhichprimarilyincludeanincreaseintheefficiencyandeffectivenessofmonetarypolicy,thestrengtheningoffinancialinnovations,andatthesametime,areductionofvolatilityinthebankingsystemthroughcompetition,areductionoftheuse,andthusthequantity,ofcash,resultinginimprovedcosteffectivenessandenvironmentalprotection,moreeffectiveprotectionofpersonaldataand,consequently,bankingsecrets,andenhancingthesecurityofbankdepositsandsavings,sincetheyarekeptinthecentralbank’s

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ownmoney.Finally,itmayalsohelpimprovetheefficiencyandeffectivenessofinternationalfinancialrelationsandthefinancingofinternationaltrade.

Amorelong-termobjectiveoftheintroductionofCBDCistocreateanecosystemintheeconomyandinthefinancialmarket,whichmightenable–withoutprejudicetomonetarypolicy,andinobservanceoftheprinciplesofthefunctioningofatwo-tierbankingsystem–efficientcooperationbetweentheinternationalfinancialsystemandthosefinancinginternationaltrade.Insuchanimaginaryframeworkofcooperation,theoperationoftoday’scorrespondingbankingsystemswouldbecomeeasier;forinstance,exchangeratesandfeeswouldbecomemoretransparentandmanageable.

Theestablishmentandoperationofawide-rangingretailDJBPsystemrequirescooperationbetweeninstitutionsandcontinuousservice.Amongtheinstitutions,thecentralbank,operator(s),paymentserviceprovidersandbanksplayaprominentroleintermsoffunctionality(Fáykiss–Szombati2021).

Competitionininternationalmarkets–i.e.howdominantthefuturerolesandfunctioningofthedigitaldollar,thedigitalyuanandthedigitaleurowillbeinthefuture–isjustasimportantasthepositiveprincipleoffuturecooperation.ItisworthreferringbacktothefactthatfinancialplannersandregulatorsstartedtodealwiththeideaofCBDCduringarealcompetitivesituation(wherethequestionwaswhoovertakeswhominthefirstposition),duringaperiodoftradewars,whenglobaleconomicgrowthwasslowingdown,rightbeforetheoutbreakofthecoronaviruspandemic.OneaspectofthefuturevisionisthequestionofwhichCBDCgainsmoregroundandinfluenceintheinternationalfinancialmarket;inotherwords,powerandsecurityconsiderationsofthefutureinternationalfinancialsystemarealsoclearlytakingshape.

5.PotentialrisksoftheintroductionofCBDC

TheintroductionofCBDCmayposeriskstothestabilityofthemonetarysystematboththeinternationalandnationallevel.Theplanningandpreparationofitsintroductionshouldbesuchthatitsoperationisregulatedandthatgovernmentsandthecompetentauthoritiescontrolthemonetarypolicy,exchangerateandfinancialstability,aswellasthedevelopmentofcapitalflows.EffortsshouldbemadetoensurethattheintroductionofCBDCstrengthensinternationalcooperationandintegrationanddoesnotleadtoadigitaldivide.Theintroductionofacentralbankmoneymayimpacttheeconomicandfinancialstabilityofthecountryconcerned.Itshouldbeensuredthatthecentralbankmoneyisreliableandequallyavailableforallusers.

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Thefirstpotentialriskfromtheaspectofthebankingsystemisparticipantsturningawayfromfinancialintermediariesanddisruptionofthenormalchainofthefinancialintermediarysystem(disintermediation)whencustomerstransfertheirbankdepositstoCBDCaccounts.5Inthisscenariobankshavenochoicebuttopayhigherinterestratesiftheyaretokeepdepositsortoraisemoreexpensivefundsandtherebyreducetheirprofits,whichwilleventuallyincreasethecostsoflendingorforcethemtoreducecollaterals.

Suchasituationmightoccurifthecentralbankdigitalcurrencyismuchmorereliableforusersasapaymentinstrument,avaluestoreoraguaranteeofconvertibilitythanprivatedigitalmoneysoranyotherelectronicmoney.Thisiswhyparticularattentionistobepaidtothebankingsector,lestbankssuddenlylosealargenumberofcustomerstotheattractionofaverysuccessfulCBDC,lesttheyconvertbankdepositsenmasseintoCBDCsandlesttheprocessofbanklendingbejeopardised.Thisriskmightbemitigatedbythecurrentlyoperatingsystemofbankdepositinsurance.

SomeoftheincumbentbanksmayopposetheintroductionofCBDCbecauseitmightincreasetheirfinancingcosts,reducecapitalinvestmentsfinancedbybanksandthisnewformofvaluestorage,providedbytheCBDC,andavailableforall,mightmakelargenumbersofcustomersquittheirbanks,i.e.triggerabankpanic.Thesearepotentialrisks;theimpactsonbanksandfinancialstabilitylargelydependontheconditionsoftheapplicationofthegivenCBDCandtherelevantmonetarypolicy(Andolfatto2021).Inthecaseofabankrun,however,CBDCmakesitpossibleforacentralbanktoquicklytakemoretargetedactiontopreventormitigatetherisksthatoccur.

AnotherpotentialriskintheintroductionofCBDCisthatinthecaseofeconomicorfinancialshocksitmightsignificantlyamplifytheirspillovereffectsandthustheirinternationalcombinations.Suchimpacts–ortheirlikelihood–largelydependonthenatureandconditionsoftheoperationoftheCBDCstobeintroduced(BIS2020).

6.CBDCsintheinternationalfinancialenvironment

Asnotedabove,plansfortheintroductionofcentralbankdigitalcurrenciesquicklyemergedasaconsequenceoftherapidpenetrationofdigitalfinancialinnovations.Thiswasfollowedbyincreasinglyintensiveanalysesoftheconditionsandrequisitesoftheirapplicationandpreparationsofschedules.ThenextstepwasthetestintroductionofCBDCs,primarilyinnationaljurisdictions.Afterthefirst

5ItshouldalsobenotedthatanalysespreparingtheintroductionofCBDCsdonotenvisageCBDCswithoutanylimitationwhatsoever;theyarebasedonassumptionsofinstrumentswithquantitylimitstomitigatethisrisk.

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successfultrials,theso-calledDigitalSanddollarwasintroducedontheBahamas.6Thecentralbanksofanincreasingnumberofcountriesstartedthereaftertoassesstheconditionsfor,andtheurgencyof,theintroductionofCBDCs.

Becauseofthecontinuousprogress,wereviewthedevelopmentswithoutintendingtoprovideanexhaustiveoverviewoftheinternationallandscape.Allofthecentralbanksthathavecurrenciesofglobalrelevanceareprioritisingthepossibilitiesofintroducingandusingcentralbankdigitalcurrencies.ThefirstconcretestepsinthisfieldweretakenbythePeople’sBankofChina,buttheEuropeanCentralBankandthecompetentfinancialauthoritiesoftheUSAarealsoassessingtheconditionsandrequisitesfor