THE NEED AND THE CHALLENGES OF THE INTRODUCTION OF CENTRAL BANK DIGITAL CURRENCIES

Abstract

Central banks observe the impact of technological changes and digitalisation on economic activity and changes in preferences and behaviour of the general public which has been showing increased interest in digital assets. The desire to preserve monetary sovereignty and stability, at a time of sharp decline in the use of cash, leads central banks to launch projects aimed at introducing central bank digital currency (CBDC). This paper explains the incentives for the development of CBDC, analyzes the dilemmas in their design and conceptualization, gives an overview and presents the results of the ongoing CBDC projects. The introduction of CBDC entails controversial choices, potentially opens up risks for existing financial institutions and faces the challenge of achieving widespread acceptance. An approach to the development of CBDC that respects all participants in the financial system and assigns them operational roles in the functioning of the digital money system of central banks can prevent disruption and obstructions and at the same time strengthen its likely the benefits, since it is difficult to imagine the future of money without central bank digital money.