Central Bank Digital Currencies (CBDCs) are gaining traction as governments explore digital alternatives to cash. This article examines the implications of CBDCs on the financial system.
What Are CBDCs?: Define CBDCs as digital currencies issued by central banks, aimed at enhancing the efficiency of the payment system.
Advantages of CBDCs: Discuss benefits like improved transaction speed, reduced costs, financial inclusion, and the ability to implement monetary policy more effectively.
Challenges and Concerns: Highlight concerns such as privacy issues, cybersecurity risks, and potential impacts on commercial banks.
