Pros and Cons of Digital Currency

Excerpt:

"Central bank digital currencies

Pros

• Address decline in use of cash, likely to accelerate amidst Covid-19 – help central banks maintain control over currency’s circulation and support financial inclusion
• Challenge threat posed by cryptocurrency or other digital coins launched by private companies like Facebook’s Libra
• Fast, efficient method of payment and exchange

Cons

• Potential competition between central banks and commercial banks for consumer deposits, interest and lending
• Questions over CBDC requiring central bank to undertake KYC/AML etc and other operational burdens usually handled by commercial banks
• Necessary tradeoffs in technological infrastructure between security and efficiency"

https://www.finextra.com/the-long-read/37/the-pros-and-cons-of-cbdcs

Image: FinExtra