The news: Central bank digital currencies (CBDCs) may offer users “few compelling benefits” they don’t already get elsewhere—limiting adoption and turning them into an “expensive failure,” according to the Center for European Reform (CER).
- The UK-based think tank said existing bank accounts and state-backed savings options already provide the benefits to consumers and retailers that CBDCs would bring.
- For the EU, the CER argued regulation would be a more sensible way to make European payments cheaper and more diverse, competitive, and innovative.
The global picture: More than 100 countries have considered launching CBDCs, including the UK, US, and EU. But only a handful of countries—among them Nigeria, the Bahamas, and some eastern Caribbean nations—have successfully launched a digital currency.
Part of CBDCs’ appeal is that they are more stable than traditional cryptocurrencies like Bitcoin because they’re backed by a central government. Having a more regulated and centralized framework will, in theory, protect consumers. And developing countries may be able to bring more underbanked citizens into the financial system.