Debating the Need for CBDC

The Digital Currency Conference took place in London in September this year, starting with a workshop focused on the Digital Pound. This spent time trying to establish the use cases that make a Central Bank Digital Currency (CBDC) a necessity so that it is actually used. This is a recurring topic currently as central banks work through whether to introduce a CBDC.

Use cases for a CBDC

A range of ideas were put forward :as to how a CBDC might benefit society

Small businesses – it was suggested that for CBDCs to succeed, small businesses need to be key users of them.

• First time, only payment, although for their own payments they will need to balance off losing interest compared with better cash flow 
• Cost savings when lots of small payments
• One benefit they may want to use is making tax effortless linking invoices and receipts automatically into the tax system 
• For small and medium size enterprises, CBDCs could make cross border payments easier and cheaper.