CBDCs – a (r) evolution of money

Abstract

The monetary landscape is changing at a pace that is never seen before. The incumbent players are faced with challenges coming from international events that are changing the post war monetary order while technological breakthroughs alter the traditional understanding of money any payments. The process of digitalization of money and the emergence of different forms of private digital money that are decentralized and out of the official monetary system managed or supervised by a central bank is the most serious challenge for the future of the current monetary system. The central banks are well aware of this challenge and are trying to be proactive and to adopt to the new circumstances. They try to use all the benefits from the new technology while providing a state backed money that has the state authority behind them. Thus, the central bank digital currencies as a new form of central banks money are vastly researched by almost all the leading central banks. The CBDCs should ensure the existence of a risk-free central bank money in a highly digitalised and cashless economy. The debate for a possible launch of the CBDCs should also include a debate for the legal aspects of the introduction of this new form of money. This debate is primarily focused on changes in the monetary law, monetary sovereignty and the effects on the financial and banking system.