THE NEED AND THE CHALLENGES OF THE INTRODUCTION OF CENTRAL BANK DIGITAL CURRENCIES

Central banks observe the impact of technological changes and digitalisation on economic activity and changes in preferences and behaviour of the general public which has been showing increased interest in digital assets. The desire to preserve monetary sovereignty and stability, at a time of sharp...

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Published in:Proceedings of the Faculty of Economics in East Sarajevo / Zbornik Radova Ekonomskog Fakulteta u Istočnom Sarajevu 2023-01 (26), p.57-69
Main Authors: Lukić, Velimir, Popović, Svetlana, Janković, Irena
Format: Article
Language:English
Subjects:
Central bank digital currencies
central bank digital currency
Central banks
Currency
Digital asset management
Digitization
Economy
Financial Markets
monetary system
Pandemics
Technological change
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Summary:Central banks observe the impact of technological changes and digitalisation on economic activity and changes in preferences and behaviour of the general public which has been showing increased interest in digital assets. The desire to preserve monetary sovereignty and stability, at a time of sharp decline in the use of cash, leads central banks to launch projects aimed at introducing central bank digital currency (CBDC). This paper explains the incentives for the development of CBDC, analyzes the dilemmas in their design and conceptualization, gives an overview and presents the results of the ongoing CBDC projects. The introduction of CBDC entails controversial choices, potentially opens up risks for existing financial institutions and faces the challenge of achieving widespread acceptance. An approach to the development of CBDC that respects all participants in the financial system and assigns them operational roles in the functioning of the digital money system of central banks can prevent disruption and obstructions and at the same time strengthen its likely the benefits, since it is difficult to imagine the future of money without central bank digital money.
ISSN:1840-3557
1986-6690
DOI:10.7251/ZREFIS2326057L