Navigating the Digital Paradigm Shift

Abstract

Key drivers of banking reform include central bank digital currencies. When building central bank digital currencies, central banks and regulators have to negotiate essential characteristics and strategic design features to adapt to the digital revolution. CBDCs digitize fiat currency in a revolutionary central bank-supervised fashion. CBDCs may improve financial inclusion, payments, and monetary policy. The complex design of central bank digital currencies (CBDCs) includes wholesale and retail businesses, technology, and regulatory frameworks. Central banks worldwide handle central bank digital currencies differently in pilot projects and research. Confidentiality, cyber security, and traditional banking are covered in the chapter. Central bank digital currencies and digital technology are changing banking. Carefully constructed central bank digital currencies (CBDCs) may unleash their revolutionary potential.