Technology attributes
Other attributes
There are two types of CBDC’s, retail CBDC’s and wholesale CBDC’s. Retail CBDCs are digital currencies that can be used by the general public for retail transactions, while wholesale CBDCs are digital currencies that can only be used by financial institutions for wholesale transactions.
- CBDCs could help to reduce the costs of printing and circulating physical currency, and could also make it easier for people to conduct transactions using digital devices such as smartphones.
- CBDCs could offer greater security than traditional forms of payment, as they would be more difficult to counterfeit.
- CBDCs could help to increase financial inclusion by providing access to digital financial services to those who do not have a bank account or who are unbanked.
- CBDCs could enable faster and cheaper payments, as they would be processed digitally and would not need to go through the existing banking system.
- CBDCs could be vulnerable to cyber-attacks, as they are digital in nature.
- CBDCs could be used for money laundering and terrorist financing activities.
- CBDCs could pose privacy and data protection risks, as personal data would be collected and stored in digital form.
- CBDCs could have an impact on the economy, as they could potentially disrupt the existing financial system.
The People's Bank of China started researching CBDC in 2014. But until 2019 all research was a secret. In October 2019 Chinese president Xi Jinping has talked about a huge perspective in blockchain technology. After his speech, the bank published a press release about DCEP - chinese cryptocurrency. It's the first in the world CBDC that is close to launch for сitizens. Now the chinese CBDC is testing in a few cities.
In 2022 the Swiss National Bank successfully tested the integration of CBDC with commercial and financial institutions. In testing took part Goldman Sachs, Citi, Credit Suisse, Hypothekarbank Lenzburg and UBS. National Bank tested integrating CBDC into their bank systems, trying to transfer money between them and cross-border.
“To continue fulfilling their mandates of ensuring monetary and financial stability, central banks need to stay on top of technological change. Project Helvetia is a prime example of how to achieve this. It allowed the SNB to deepen its understanding of how the safety of central bank money could be extended to tokenized asset markets,” said Andréa M. Maechler, Member of the Governing Board, Swiss National Bank.
In August 2022, the Reserve Bank of Australia (RBA) announced that it would carry out a year-long pilot project to explore “innovative use cases and business models” for a CBDC.
