# Importance and Process Recently, there has been significant interest in implementing CBDCs. Numerous academic studies exist on this topic, though [CBDC Tracker](https://cbdctracker.org) is a good starting point. Some data may be outdated, but many countries have advanced to pilot phases. Examples like Nigeria's eNaira have successfully launched. There is also a more libertarian-oriented [HRF CBDC Tracker](https://cbdctracker.hrf.org/home). Generally, motivations vary, but it should not be surprising that smaller countries lead in adoption. In a [BIS study](https://www.bis.org/publ/bppdf/bispap136.pdf), central bank motivations have been outlined. Financial stability, implementation of monetary policy, financial inclusion, and efficiency and security of payment systems are highlighted. When we exclude monetary policy considerations, Bitcoin's perspective is actually similar. ![[CleanShot 2023-11-26 at [email protected]]] In an [IMF study](https://www.imf.org/-/media/Files/Publications/FTN063/2023/English/FTNEA2023007.ashx), five stages of development are mentioned. Upon closer inspection, it provides a good summary of the process. Questions are drawn from the relevant sections of the study. Some sections I authored, others I translated. Reading the original study would therefore be highly beneficial. _Italicized_ sections generally indicate translations, along with the questions. ## 2025-2026 Update: Global Progress As of 2025, CBDC developments have made significant progress. 94% of central banks are engaged in CBDC work, 11 countries have fully launched digital currencies, and pilot programs continue in over 30 countries. More than 139 governments are in CBDC development or evaluation stages. These figures demonstrate CBDCs' shift from theoretical discussions to practical implementations. ### 1) Preparation Topics and questions related to technology are addressed here. * What do emerging technologies and new solutions offer? * How do they work? * What architectures emerge for CBDCs and what are the differences? Particularly, wholesale/retail architectures are important as they affect currency distribution and the central bank's role. Some countries serving as pioneers set examples for others. This brings both opportunities and risks. _At this stage, objectives, policy goals, feasibility, benefits, disadvantages, risks, and success criteria are determined._ Some countries have created working groups for each field (economics, law, technology, etc.) to divide responsibilities. ### 2) Proof of Concept The feasibility and functionality of the emerging product must be proven here. Various scenarios must be considered, as whether a single authority (the central bank) should be the only authority is still a debated question. * Which assumptions need validation or invalidation? * How are various architectures and design elements tested? * What technologies support the requirements and how do they work? _This process aims to validate or invalidate assumptions about CBDC and success conditions, including policy objectives, user motivations, technology options and maturity, as well as those related to legal, financial and technical questions._ Examples here might include propositions that privacy and compliance can be maintained simultaneously, stakeholders are competent, and offline technologies can provide secure and easy-to-use payments. ### 3) Prototype The transition from technical to economic dimensions gradually occurs here. Given the complex nature of economies, robust infrastructure is necessary. The integration of technical and economic aspects with a multidisciplinary approach is essential to addressing the prototype in various dimensions. A CBDC and its surrounding ecosystem are created. [ECB's preparation phase](https://www.ecb.europa.eu/press/pr/date/2023/html/ecb.pr231018~111a014ae7.en.html) can be evaluated alongside the above. * How are all core elements of the architecture and CBDC technology stack integrated? * What people, skills, and processes are necessary to secure and support the CBDC platform? _After an iterative process, optimal partners are tested and selected, while the central bank and other stakeholders begin building initial capacity in personnel, governance, regulation, and technology. This stage results in the development of a working "product" ready to be tested in several low-risk environments. A working prototype should include stakeholder representation, including a representative user panel. Results will lead to decisions to **suspend the project, continue research and development of new aspects of the CBDC, or proceed to the pilot phase for advanced testing**._ ### 4) Pilot Real-world testing of CBDC usage scenarios, data, and stakeholders occurs at this stage. Countries like China, Russia, and India are relevant here; from a BRICS perspective, this situation merits analysis. ![[CleanShot 2023-11-26 at 09.14.29@2x 1.png]] _Pilot implementation includes all stakeholders for target use cases in low-risk environments, including intermediaries, merchants, and selected users. The development team assesses the operational readiness of the proposed solution. **Key factors such as scalability, resilience, maintenance, risk management, and user experience, adoption, and support** are tested in real conditions. The pilot phase also aims to ensure the proposed solution is compatible with policy objectives. Adoption likelihood is also examined, and a robust marketing and communications strategy is typically developed at this stage._ The [blockchain trilemma](https://academy.binance.com/en/articles/what-is-the-blockchain-trilemma)—the impossible triangle between decentralization, scalability, and security—may not be a problem for CBDCs, but careful scrutiny of security and other factors under intensive use is necessary, making this process important for the security of the entire economy. ### 5) Launch After all this, the CBDC meets the public. Though this is the final stage, questions still need to be asked. Moreover, after system launch, dynamic monitoring should continue. From cryptocurrency markets, especially regarding smart contracts, we are aware of the developments and consequences of malicious intent. Monitoring and maintenance of problems overlooked during the pilot phase play a critical role. * Are adoption and risk reduction appropriately incentivized? * How are innovative developments in the sector monitored, tested, and implemented to benefit CBDCs? * How is operational stability and security ensured? ## Questions to Ask Throughout the Process * _Who will make decisions?_ This is actually a good question. Recalling Bitcoin, criticism emerged regarding central banks' competence and intentions. Given the technical, economic, legal, sociological, and political dimensions of this issue, how and by whom decisions will be made is critically important. * _Which outcomes and data will be considered?_ The transparent compilation and presentation of data obtained here is critical. We already know the importance of transparent data, but how it is filtered is also critical. * _Are targets, tools, experts, budgets, legal support, requirements, criteria, etc., defined for the next stage?_ This point seems to be where many central banks have unclear thinking. Being a pioneer is important, but planning is essential. If there is no plan, monitoring what others do is necessary. The BIS periodically compiles studies on central banks' views or results. ### Costs Aside from societal costs or benefits, infrastructure costs and maintenance processes, and how each stakeholder is affected, stand out. While consultants, teams, and researchers take on roles in the preparation phase, software engineers and cybersecurity specialists are added in the prototype phase. In the pilot and launch phases, the list expands to include full-time researchers, software experts, educators, user support and customer service providers, and compliance/security specialists. Beyond fixed costs, there are both foreseeable and likely unforeseeable variable costs. # Current Status (2024-2025 Update) CBDCs can and will be implemented in various ways, and [research for the Bank of Canada](https://www.bankofcanada.ca/2022/10/staff-analytical-note-2022-14/) is a good starting point. These approaches can be summarized under the following types: * **Centralized:** As we already know, a single authority can assume all responsibility, but not much changes—we can only speak of digitalization. * **Leaderless:** In chains like Bitcoin, decision-making mechanisms are decentralized and decisions are achieved through consensus. A completely leaderless/decentralized structure is not a realistic option for CBDCs. * **Macro/Micro Partitioned:** Actually, partition concepts also apply to hard drives, etc.—independent partitions that communicate as needed. In such systems, smaller components are maintained separately, making them relatively less centralized. Banking systems, when examined as a sub-layer, can be seen as having similar characteristics. For CBDCs, such sub-layers can be created and some parts shared by actors like banks or specific sector institutions. * **Direct:** While tools like cash enable peer-to-peer transactions, for CBDCs, providing this anonymously lacks a viable infrastructure possibility, so it makes less sense. None alone provides all advantages, but depending on circumstances, a hybrid (macro/micro scale) approach could be preferred and seems likely to appeal to central banks. ![[CleanShot 2023-11-26 at [email protected]]] BIS is [testing various prototypes](https://www.bis.org/publ/arpdf/ar2023e3.htm); _Helvetia_ focuses on wholesale CBDCs and tokenization, _Jura_ on cross-border transfers, _Genesis_ on carbon credits for sustainable finance, _Dunbar_ on international payments, _mBridge_ on multi-party payments with multiple CBDCs, and _Dynamo_ on integrating smart contracts into finance. Most are conducted by Switzerland and Hong Kong. They primarily focus on tokenization. ![[CleanShot 2023-11-26 at [email protected]]] ## 2025 Update: Leading Projects and Countries ### Digital Turkish Lira (Turkey) In the Medium-Term Program (2024-2026) report prepared by the Ministry of Treasury and Finance, the implementation of the Digital Turkish Lira through legal regulation is targeted for Q4 2024. Thus, Turkey is actively advancing on CBDCs and is expected to make significant progress in system design and pilot phases. ### Digital Euro (Europe) In October 2025, the European Central Bank (ECB) completed its two-year preparation phase for the Digital Euro. Key developments: * **Draft Rulebook:** Technical framework and detailed operational guidelines were published * **Timeline:** - 2026: Expected regulatory design - 2027: Pilot projects to begin - 2029: Potential first digital euro issuance (subject to EU legislation adoption) * **Special Features:** Retail CBDC design, integrated payment ecosystem, privacy-surveillance balance ### China's Digital Yuan (e-CNY) - Perhaps the Most Advanced CBDC China has built the world's most advanced CBDC ecosystem: **Scale and Usage:** * As of September 2025: **14.2 trillion RMB (approximately $2 trillion)** in transaction volume * **Over 800 million wallets** * **3.48 billion transactions** (as of November 2025) * Successfully operating as a retail payment system **Historic Shift in 2026: Interest-Bearing CBDC** China's most significant move in 2026 is making e-CNY the world's first interest-bearing central bank digital currency: * **Timeline:** Starting January 1, 2026 * **Interest Rate:** 0.05% for demand deposits (alignment with traditional bank deposits) * **Legal Status:** e-CNY deposits will be protected under the deposit insurance system * **Significance:** Aiming to increase adoption by making CBDCs attractive as savings instruments **International Expansion:** * Cross-border pilot with Singapore * Cooperation targets with Thailand, Hong Kong, UAE, and Saudi Arabia ### mBridge Project - Multi-Party Cross-Border Payments This project, involving both China and other countries, reached an important milestone in 2024: **Participants (as of 2024):** * Central Bank of China - Digital Currency Institute (PBOC) * Bank of Thailand * Central Bank of UAE * Hong Kong Monetary Authority * Saudi Central Bank (joined in 2024) **Developments:** * **Mid-2024:** Reached Minimum Viable Product (MVP) stage * **October 2024:** BIS transferred project management to partners * **2025:** Actively adopted by Chinese banks, progressively: - Major bank implementations - Regional banks (August 2025) - Small and private banks (July 2025) **Objectives:** * Reduce cross-border payment costs * Increase transaction speed (direct data transfer between parties) * Minimize operational complexity * Modernize international payment and settlement systems ### Other Successful CBDC Implementations Fully launched CBDCs: * **Jamaica (JAM-DEX)** * **Bahamas (Sand Dollar)** * **Zimbabwe (ZiG)** * **Nigeria (e-Naira)** These countries provide live examples of how CBDCs can function in retail payment systems and their acceptance by the public. ## Monetary Policy ### Monetary Policy Transmission Channels ![[CleanShot 2023-11-28 at 18.48.01.png]] **Interest rates** are among the most direct ways central banks influence the economy. When a central bank changes its policy interest rate, it affects other interest rates in the economy, including those on loans, mortgages, and savings. For example, if a central bank lowers interest rates, borrowing becomes cheaper. This encourages businesses to invest and consumers to spend, leading to economic growth. Conversely, higher interest rates make borrowing more expensive and can slow economic activity. **The credit channel** focuses on how changes in monetary policy affect banks' ability to lend. When a central bank injects money into the banking system (usually by lowering interest rates or through quantitative easing), banks have more funds to lend. As businesses and consumers can access credit more easily, this increased lending can stimulate economic activity. If the central bank tightens monetary policy, the opposite may occur, with declining credit slowing economic activity. Monetary policy can also affect the economy through **asset prices**. If a central bank lowers interest rates, this typically leads to rising prices for assets like stocks and real estate. This increase in asset prices creates a wealth effect—people feel wealthier and thus spend more. Additionally, higher asset prices make it easier for businesses to raise capital by issuing stocks or bonds. **The exchange rate channel** involves the effect of monetary policy on currency value. For example, a central bank lowering interest rates may cause the national currency to depreciate. A weaker currency makes exports cheaper and imports more expensive, potentially boosting export-driven economic activity. If the currency appreciates due to tight monetary policy, the opposite occurs. These channels are interconnected. For example, a change in interest rates can simultaneously affect bank credit, asset prices, and exchange rates. Low interest rates lead to more bank credit, higher asset prices, and a weaker currency, all stimulating economic activity. The reverse occurs with higher rates. The overall effect of monetary policy on the economy depends on the combined effect of these channels and how they interact with other factors like fiscal policy, global economic conditions, and consumer confidence. Monetary policy will be affected in various ways by CBDC implementation [(Das, 2023)](https://www.imf.org/-/media/Files/Publications/FTN063/2023/English/FTNEA2023007.ashx): ![[CleanShot 2023-11-26 at [email protected]]] **Increased competition for bank deposit funding can strengthen the interest rate and credit channels.** Since banks use market power to expand net interest margins, the pass-through from policy rates to deposit rates is stronger when banks have less market power. Increased wholesale funding will strengthen the bank lending channel. Wholesale funding costs tend to be more sensitive to the central bank's policy rate compared to retail deposits, which are relatively insensitive to interest rates. Moreover, when a bank relies more on wholesale funding, changes in its balance sheet have a larger impact on total funding costs. **Low bank profits may have an asymmetric but relatively small effect on the interest rate channel.** **Higher levels of financial inclusion can strengthen the interest rate and asset price channels.** Greater financial inclusion means more households will be sensitive to monetary policy as CBDCs increase access to interest-sensitive borrowing and saving instruments. **Increased monetary autonomy as a result of lower dollarization or cryptoization levels will strengthen all transmission channels.** Implementing a CBDC in dollarized economies makes the local currency a more attractive payment instrument, encouraging its use over dollars or euros. This helps preserve monetary sovereignty and sustains demand for central bank money. With greater monetary autonomy, monetary policy transmission will be stronger across all channels. **There are unlikely to be additional effects on the exchange rate channel.** The fundamental relationship between interest rates and exchange rates, as captured by the uncovered interest parity condition, is expected to remain unaffected. ### 2025 Perspective: Monetary Policy Effects of Interest-Bearing CBDCs China's implementation of interest rates on e-CNY starting in 2026 opens a new dimension in CBDC research. This development: * **Competition with Bank Deposits:** May increase savers' shift to CBDCs, affecting bank deposits * **Beyond Payment Medium:** CBDCs can now function as storage and savings vehicles * **Monetary Policy Mechanisms:** Potential for more fine-tuned monetary policy through direct adjustment of CBDC interest rates * **Financial Inclusion:** Increased possibility of unbanked populations saving and investing # Opportunities and Risks ## Opportunities ### Technological Perspective #### Distributed Databases This is a much-discussed and now familiar topic, so I'll add briefly and expand later. From the same [IMF study](https://www.imf.org/-/media/Files/Publications/FTN063/2023/English/FTNEA2023007.ashx): **Centralized Databases** - More mature capabilities for technology, security, and vendor relationships - Better (?) privacy control - Easier scaling - Easier upgrades - Extensive existing product base built on top **Distributed Databases** - By design, more resilient if there is no single point of failure - Offer new governance options - Central bank is not required to hold specific data - Enhanced compatibility with DLT-based tokenized financial assets - New innovative field with solutions emerging from decentralized finance ![[CleanShot 2023-11-26 at [email protected]]] ### Economic Perspective #### Macroeconomic Perspective ##### General Framework When inflation targeting is in place, CBDCs can have various advantages. Drawing from another [IMF study](https://elibrary.imf.org/openurl?genre=journal&issn=2664-5912&volume=2023&issue=010&cid=538517-com-dsp-crossref), in brief: * CBDCs can increase banks' wholesale funding share. To the extent deposits flow from CBDCs, banks can substitute for deposit shortfalls with wholesale funding. * CBDCs can reduce bank profits. If banks raise deposit interest rates to compete with CBDCs or if funding costs rise due to a shift toward wholesale funding, bank profits will decline to the extent that higher costs are not fully reflected in higher lending rates. * CBDCs can support financial inclusion. * CBDCs can help counter dollarization or resist "cryptoization." In dollarized economies, implementing a CBDC makes the local currency a more attractive payment instrument, encouraging greater use. _The effects of CBDCs on bank competition, wholesale funding, and profits depend on the degree to which banks differentiate themselves from CBDCs._ ##### Financial Tightening CBDC implementation will also affect economic tightening. Broadly, increased competition and wholesale funding would have tightening effects, while increased financial inclusion would have expansionary effects. The direction of the effect on bank profits and dollarization/cryptoization is uncertain [(Das, 2023)](https://www.imf.org/-/media/Files/Publications/FTN063/2023/English/FTNEA2023007.ashx). ![[CleanShot 2023-11-26 at [email protected]]] * **Increased competition for bank deposit funding will tighten financial conditions.** Increased wholesale funding will be more expensive. Rising wholesale funding can increase market discipline and reduce credit to the economy. Following CBDC implementation, as banks rely more on uninsured wholesale funding, market discipline may increase and credit could contract. Increased wholesale funding may be less stable. Retail deposit holders are more stable funding sources than wholesale deposit holders. Banks may need to hold more liquid assets or reduce lending to meet regulatory requirements. The quantitative effect is uncertain and depends on expected deposit levels. * **Low bank profits have an uncertain effect on financial conditions.** Banks can tighten credit standards or raise interest rates to compensate for declining profitability; however, some banks might increase risk-taking to offset declining profits. * **Increased financial inclusion/reach, to the extent CBDC promotes deposit account opening, could spur savings mobilization among previously unbanked and underserved populations.** Increased savings could provide a stable pool of funds for more lending; however, even if CBDC encourages much of the unbanked population to open accounts, this group holds a small share of total wealth, so mobilized savings may be small. * **Using CBDC transaction histories as alternative data sources for credit underwriting can reduce information asymmetry in credit risk, lower credit rates, and expand access to credit.** * **Reducing dollarization/cryptoization has an uncertain effect on financial conditions.** Reduced cryptoization, similar to financial inclusion, could ease financial conditions by potentially increasing deposit supply. Considering deposits are the cheapest funding source, banks have room to lower credit rates due to reduced funding costs. However, dollarization effects are uncertain as they depend on the interest rate differential between domestic and foreign currencies. >The central bank should closely monitor the macroeconomic environment to prevent unwanted easing/tightening of financial conditions. #### Microeconomic Perspective Microeconomic effects can be anticipated under specific headings. However, it is important to remember that all these potential benefits come with various risks. ##### Through Financial Institutions - **Reducing intermediation:** CBDCs provide individuals with direct access to central bank money, potentially eliminating commercial banks' intermediary role and reducing dependence on bank deposits. This can affect bank funding and profitability. - **Competition:** CBDCs compete with private payment systems, affecting their market share and revenue. - **Efficiency:** CBDCs potentially enable faster and cheaper payments, benefiting consumers and businesses. ##### Through Credit Channel - **Financial inclusion:** CBDCs can promote financial inclusion by providing unbanked populations access to financial services. - **Credit creation:** CBDC design affects the amount of credit in the economy, influencing consumption and savings. ##### On Consumption - **Consumption patterns:** CBDCs, through more transparent and easily tracked transactions, may change consumer spending patterns. - **Financial literacy:** CBDCs make financial concepts more tangible, promoting financial literacy. - **Data privacy:** CBDC use raises privacy concerns as central banks can access detailed information about individual spending habits. *Potential Positive Effects on Consumption* - **Increased transparency and control:** If consumers have greater visibility into spending habits, this could potentially lead to better budgeting and financial management. - **Reduced intermediary dependence:** Consumers become less dependent on third-party financial institutions for transactions, potentially leading to lower costs and more flexibility. - **Programmable money potential:** A significant contribution could be here. CBDCs can be programmed to trigger specific actions based on predefined conditions, encourage savings, and reduce impulsive spending. Another aspect is that such spending may be inherently unnecessary. - **New opportunities for micropayments and sharing economies:** CBDCs facilitate low-value transactions, encouraging innovative business models and new ways to share resources. As crowdfunding and similar financing methods gain momentum today, the ability to do this transparently makes sense. *Potential Risks to Consumption* - **Increased state surveillance:** CBDCs can enable governments to track individual spending patterns with unprecedented precision, raising concerns about privacy and potential misuse of data. Both technological and administrative competence and good-faith management are necessary here. - **Reduced financial stability:** Consumers shifting deposits from banks to CBDCs could negatively affect bank liquidity and financial stability. Here, as analysis shifts to the macro level, discussions emerge about how the system would function alongside cash. - **Technological challenges:** As discussed, implementing and maintaining secure and reliable CBDC infrastructure is a complex and expensive undertaking for governments. - **Exclusion of certain populations:** Those without access to technology or the internet could be excluded from CBDC benefits and experience worsening existing inequalities. This could create a situation contrary to the inclusivity philosophy put forward when Bitcoin emerged. - **Market manipulation potential:** CBDC programmability could lead to unintended consequences or be used for manipulation by governments or other actors. Today, many exchanges and cryptocurrency markets suffer from this. For CBDCs, while the risk may not be as large, exposure to manipulation across different dimensions is a serious concern. ##### Other - **Effects on innovation:** CBDCs can promote innovation in the financial services sector. Legal regulatory framework compatibility and limits are important here. Microeconomic dimensions closely involve competition and markets. ## Criticisms ### Technological Perspective #### Speed Given that a common criticism of cryptocurrencies is transaction speed and costs, early public adoption of CBDCs requires optimization and reasonable transaction costs. While centralized infrastructure in financial services has higher performance and faster transactions, central banks will experiment with different product types to find balance between technical and economic aspects. #### 2025 Perspective: Transaction Volume and Scalability China's e-CNY reaching over $2 trillion in transaction volume demonstrates that CBDCs are technically sufficient in terms of transaction speed and scalability. The problem now is not purely technological but cultural acceptance and institutional design. ### Economic Perspective #### Privacy Privacy and privacy protection will play a critical role in both CBDC implementation and acceptance. One of the most discussed aspects of the current money system is the concept of privacy and where information concentrates and how quickly it spreads. Thinking of privacy as a good, it has a certain cost—how it is borne and its externalities require discussion. While we cannot delve into philosophy, panopticons, and deep discussions here, this is a matter worth considering. Assuming cash has the highest privacy, how closely this level can be approached is an important question. ### From Other Angles #### Legal CBDC has many legal dimensions and will require international cooperation. The IMF particularly emphasizes that uncontrolled capital flows in crypto assets pose a major risk to countries due to their capital flows. FATF emphasizes international cooperation in combating money laundering and terrorism financing through virtual asset guidelines. In this perspective, similar targets may require coordinated CBDC regulation. Legal boundaries regarding privacy and transparency levels require well-structured and balanced approaches and will significantly influence public acceptance of CBDCs. Particularly when privacy is considered, if the economy has both cash and CBDCs and if monetary policy is not positively viewed by the public, it would not be unexpected for cash holdings to have exclusionary effects due to their untraceability. Beyond this, excessively restrictive CBDC regulations, combined with stringent compliance requirements, can hamper technological innovation and impede the development of new technologies and business models. Moving to the intersection of economics and law, adapting to complex regulatory frameworks can be challenging for small businesses and new entrepreneurs. High compliance costs restrict new players' market entry. Similarly, strict regulations can create barriers to financial sector participation for non-financial sector populations and block financial inclusion potential. The rapidly developing ecosystem may outpace regulators' ability to adapt. This regulatory lag creates uncertainty and gaps in oversight. On the other hand, excessive regulation risks excessive state authority access to individual financial freedoms, and clearly balancing regulation and personal autonomy will be a challenging process. As has emerged in some parliamentary discussions about influencers, the risk that regulators may be influenced by established sector actors' interests could jeopardize CBDCs' and regulations' intended benefits and prevent fair market competition. #### 2025 Perspective: International Coordination The rapid progress of projects like mBridge demonstrates that the international dimension of CBDCs is increasingly important. Central banks cooperating on monetary policy without establishing institutional structures demonstrates potential to transform traditional international monetary systems. However, this can create coordination and trust issues between countries. # Conclusion and Future In 2025-2026, CBDCs have transitioned from theoretical discussions to practical applications and large-scale pilot phases. While China's e-CNY showcases the world's most advanced retail CBDC, Europe's Digital Euro project advances on a 2026-2029 implementation trajectory. Turkey's Digital Turkish Lira project similarly fits this timeline. ## Key Developments 1. **Scale and Adoption:** China's $2 trillion transaction volume proves CBDCs are scalable systems. 2. **Interest-Bearing CBDC:** China's plan to provide interest rates on e-CNY from 2026 initiates a new CBDC design paradigm. 3. **Cross-Border Payments:** The mBridge project represents a concrete step toward modernizing the international payment system. 4. **Legal-Technical Infrastructure:** The core issue is no longer technology but legal framework and public acceptance. ## Open Questions and Future Research Areas - How will CBDCs affect financial stability? - Can monetary policy effectiveness be enhanced? - Can a privacy-surveillance balance be established? - What new risks will programmable money introduce? - Can international CBDC systems replace dollar-centered systems? - How significant can financial inclusion effects be? ## Concerns and Opportunities This period's critical point for CBDCs is governments' technological competence and good-faith management. Design choices (privacy levels, funding mechanisms, oversight tools) will determine long-term outcomes. Financially, since CBDCs will alter banking system dynamics, managing this transition is crucial for overall economic stability. Digital Euro's implementation around 2029, along with 2026-2027 pilot projects, indicates CBDCs will become central to the global economy. --- ## Sources and References - [CBDC Tracker](https://cbdctracker.org) - [HRF CBDC Tracker](https://cbdctracker.hrf.org/home) - [BIS Study](https://www.bis.org/publ/bppdf/bispap136.pdf) - [IMF CBDC Study (Das, 2023)](https://www.imf.org/-/media/Files/Publications/FTN063/2023/English/FTNEA2023007.ashx) - [Bank of Canada CBDC Research](https://www.bankofcanada.ca/2022/10/staff-analytical-note-2022-14/) - [ECB Digital Euro Progress](https://www.ecb.europa.eu/euro/digital_euro/progress/html/index.en.html) - [BIS mBridge Project](https://www.bis.org/about/bisih/topics/cbdc/mcbdc_bridge.htm) - [Atlantic Council CBDC Tracker](https://www.atlanticcouncil.org/cbdctracker/)