Today a report on central bank digital currency (CBDC) was published by the central banks of the U.S., Europe, England, Japan, Switzerland, Canada and Sweden, and the Bank for International Settlements. Nine months ago, six central banks disclosed they planned to collaborate, with the U.S. as the late joiner. None of them have as yet decided to proceed with issuing a CBDC.
The report outlines the motivations for a digital currency, as well as policy implications, features and designs. One of the more novel areas is a section on incentive designs, which includes the rather surprising suggestion that they might consider “allowing access to consumer data”.
One of the policy tradeoffs is the cost of a CBDC system and attempts to offset that cost by charging the public could discourage usage. Much like Visa and Mastercard fees that are charged to merchants, the central banks consider charging service providers.
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