Central Bank digital currency: Challenges and opportunities

Digital assets have launched a real revolution, bringing about the necessary changes in payments and banking services. Traditional banking actors and technology firms are taking a serious interest in these assets and want to embrace this movement to stay caught up. In the current developments in the broad spectrum of digital currencies, particularly CBDCs, the article aims to provide a global overview from different perspectives: the central bank and the regulators, the financial companies, and the citizens. Issues like competition in the banking sector with the possibility of disintermediation and the monetary policy options that the central banks explore by the valuation of their CBDCs through a policy rate different from cash, along with strategic technology decisions to be taken related to the infrastructure architecture and implementation and information privacy are only some of the challenges that the current pilot programs run by various countries are trying to address. The benefits include improved access to domestic and cross-border payments and the financial system, reduced costs, substitutes for undesirable cryptocurrencies and risky stable coins, counter tax evasion and illegal currency use, and competition between CBDCs suppliers worldwide.