CBDCs: Opportunities & Challenges

Share on facebook
Share on linkedin
Share on whatsapp
Share on twitter
Share on email
Share on facebook
Share on linkedin
Share on whatsapp
Share on twitter
Share on email
CBDCs are all over the world this year. We invited our expert, Dr. Oriol Caudevilla, to help us understand what CBDCs are and what they’re used for. Here, we want to share with you the key opportunities and challenges that are associated with this technology. Let’s have a look!

What are CBDCs?

Central Bank Digital Currency (CBDC for short) is essentially the central bank’s money, but in a digital version. In order to be considered a CBDC, there are two criterias that need to be met:

  • CBDC needs to be digital
  • CBDC needs to be issued by a central bank

However, the central bank of each country will design their CBDCs differently according to their specific needs and interests. Therefore these digital currencies can be very diverse, depending on their use cases and internal policies of the issuing banks.

What are the 3 main opportunities?

Some of the possible motivations behind issuing a CBDC, which present very exciting prospects for the future include:

1. Replacement of physical banknotes

2. Ability to fight financial crime more efficiently

3. Promotion of financial inclusion & stability


There are many more possible benefits that CBDCs could introduce to the financial services. Those will depend heavily on the actual implementation, securing and adjusting this technology to meet the needs of different countries.

What are the 3 main challenges?

Generally speaking, CBDCs are not very risky. However, there are a few aspects that are especially worth considering:

1. Are CBDCs issued in order to address a specific use case?
Each country should make sure that they’re implementing this technology to actually improve the quality of their financial services. If this is not the case, this digital currency might cause more problems than solve.

2. What about privacy?
In theory, CBDCs are capable of diminishing the ability to perform transactions privately. This will highly depend on the technology used to implement CBDCs effectively and securely.

3. Will CBDCs reshape the banking system?
Due to the fact that CBDCs can be issued in many different ways, there is a certain consideration associated with it. If CBDCs were issued directly from a central bank to the general public – this could significantly reduce the role of commercial banks. According to our expert however, this is unlikely to happen.

The topic of CBDCs is as exciting as it is vast! But don’t worry, our short course by Dr. Oriol Caudevilla is a great place to start exploring it. Join us today and start your learning adventure!

Learn the skills of Fintech

Learn the skills of Fintech

More To Explore