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Central bank digital currencies: An active role for commercial banks

Author

Listed:
  • Denecker, Olivier

    (Expert Partner — Global Payments, McKinsey & Company, Belgium)

  • D’Estienne, Arnaud

    (Consultant, McKinsey & Company, France)

  • Gompertz, Pierre-Matthieu

    (Former Associate Partner, McKinsey & Company, The Netherlands)

  • Sasia, Elia

    (Partner, McKinsey & Company, Italy)

Abstract

With most central banks now exploring central bank digital currencies (CBDCs), commercial banks should be looking to establish their role in this fast-changing landscape. Among the roughly 90 per cent of the world’s central banks pursuing CBDC projects, many, including those in the USA and South Africa, are at the exploratory phase. Others are already managing development projects (the European Union) and pilots (China). The various imperatives behind these initiatives are easy for private actors in these markets to overlook, which sometimes complicates private–public cooperation. However, digitally issued public money stands at the forefront of central bank innovation in the monetary space. This paper reviews why central banks need to explore digital currencies and what questions they should address. It also sheds light on what commercial banks need to consider as they anticipate their stance in the CBDC development process. For both parties, the final section outlines the hurdles to successful CBDC design and rollout.

Suggested Citation

  • Denecker, Olivier & D’Estienne, Arnaud & Gompertz, Pierre-Matthieu & Sasia, Elia, 2023. "Central bank digital currencies: An active role for commercial banks," Journal of Payments Strategy & Systems, Henry Stewart Publications, vol. 17(1), pages 26-35, March.
    • Handle: RePEc:aza:jpss00:y:2023:v:17:i:1:p:26-35
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    More about this item

    Keywords

    CBDC; digital currency; central banks; commercial bank cooperation; cash 2.0;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit

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