Digital Currencies of Central Banks (CBDC): Advantages and Disadvantages

During the Covid-19 pandemic, there has been a rapid shift from offline global transaction models to digital payment models, along with increased interest in the development of Central Bank Digital Currencies (CBDCs) in various countries. Currently, around 114 countries around the world are researching and developing CBDCs, and these countries account for 95% of global GDP. Some countries have already launched CBD’s and it is very likely that CBDCs will become a part of our lives in the near future. The study discusses the essence and features of the digital currency of the central bank, examines the prospects of its implementation in various socio-economic conditions, examines the advantages and disadvantages of using digital currencies. The authors also compared the digital currency of the central bank and decentralized cryptocurrencies. The authors analyzed the global experience of central banks that explored the possibility of issuing their own digital currencies. The authors of the article use a system-structural analysis to determine approaches to understanding the concept of “central bank digital currency”. The authors also identified the potential advantages of introducing digital currencies, which strengthen the transmission mechanism of monetary policy. Attention is focused on the opportunities provided by digital currencies as an innovative payment tool for financial integration in society. It is argued that the creation of retail central bank digital currencies may pose risks to financial stability that can be minimized through the architecture of a central currency system. The authors proved the importance of using CBDC using an econometric model using the Chinese digital yuan as an example.