A flawed argument for central-bank digital currencies
Europe’s policymakers are wrong: the economy does not need a digital replacement for cash
To their critics central-bank digital currencies (CBDCs) are a fad—a solution in search of a problem. To their supporters CBDCs are a necessary response to a digitising world. Central bankers everywhere are studying the idea. Recently several have signed up to an argument in their favour: that CBDCs will be needed to anchor the value of money in a cashless financial system. It is a notion that could prompt governments to rebuild their banking and payment systems. But does it withstand scrutiny?
This article appeared in the Finance & economics section of the print edition under the headline “Money problems”
Finance & economics June 10th 2023
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