Here’s How a Central Bank Digital Currency Could Work
Chinese one-hundred yuan banknotes. (Photographer: Paul Yeung/Bloomberg)

Here’s How a Central Bank Digital Currency Could Work

Here’s How a Central Bank Digital Currency Could Work

Most of global payments are already digital, yet a central bank digital currency would provide risk-free, central-bank backed money denominated in a national unit of account -- like cash, though updated to the demands of a digital financial system. The motivations for issuing CBDC vary across countries and regions, and the policy approach and technical designs will also differ, according to research by Bloomberg Economics. Based on BIS terminology and what’s known from China and Sweden on CBDC infrastructure and access, a hybrid between light-touch and a full version looks like the most likely solution for a digital krona or a digital yuan.

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