- Central bank digital currencies (CBDC) are increasing in uptake.
- They could improve financial access and payment efficiency.
- To ensure trust in CBDC, central banks must ensure their cybersecurity.
With G7 officials recently endorsing principles for central bank digital currencies (CBDC), and over 80 countries launching some form of initiative related to CBDC, it seems their widespread deployment is a matter of time. CBDC is a digital form of central bank money that can be accessible to the general public; essentially, it consists of individuals and firms having access to transaction and savings accounts with their home country’s central bank. Those of the Bahamas, China and Nigeria have all implemented early CBDC programmes, with more expected in the future. If successful, CBDC could help policy-makers achieve goals around payment efficiency, financial inclusion, banking and payment competitiveness, access to safe central bank money in the era of digital payments, and more.
Yet like any digital payment system, CBDC is vulnerable to cybersecurity attack, account and data breaches and theft, counterfeiting, and even farther-off…
