Central bank digital currencies (CBDCs) have taken center stage amongst conversations between central banks, governments and private industry. The future of money is uncertain, but we are certain that
it will involve significant change as blockchain and distributed ledgers achieve adoption and production deployments (i.e. Bahamas) at an increasingly frequent rate. To provide clarity, we’ve framed a few question and responses in light of the research KPMG has sponsored.
A CBDC is a digital version of a fiat currency which can be deployed in wholesale and retail models. CBDC systems vary significantly in their design and implementation based on the central bank and monetary policy of the currency system, but largely aligned to either a wholesale or retail model. In many current and planned implementations, central banks are utilizing blockchain technology at the core of their system design. CBDC’s have been researched by international banks and central banks with a significant body of research being published over the past 24 months.