The private sector crypto world might be imploding in flames, but around the world central banks are pushing on with their own digital asset projects.
China has rolled out its central bank digital currency (CBDC) to several cities and it was available for use at the Winter Olympics. Many other central banks — including the Bank of England — are thinking about it and seem well disposed. The list of other enthusiast banks includes those of the eurozone, US, Sweden and Canada. India has already launched a pilot scheme, while Mexico has confirmed the launch of a digital peso by 2024.
It is a road that central banks should not be going down. A CBDC is, as the name suggests, the digital equivalent to central bank currency, or cash — notes and coins. Strictly speaking, almost every country already has one. The old name is “electronic or central bank reserves”. These are the digital things — entries in the central bank equivalent of a spreadsheet — that central banks lend to or borrow from their counterparties, the retail banks that have you and I as customers.