What does Bank of America expect from CBDCs?

Bank of America says it expects central banks and governments will drive digital-asset innovation with input from the private sector. Read more: What Will 2023 Bring for CBDCs?

What exactly is a CBDC?

“At a very high level, a CBDC is just digital money that would be issued by the central bank,” Sarah Hammer, the managing director of the Stevens Center for Innovation in Finance at the Wharton School of the University of Pennsylvania, told CNN Business.

Will CBDC issuance happen in a decade?

CBDC issuance may not happen for over a decade in some counties, but central banks are expected to “adopt technological advances or risk irrelevance over the longer term,” the note added. Bank of America says it expects central banks and governments will drive digital-asset innovation with input from the private sector.

What is a stablecoin (CBDC)?

A stablecoin is a type of cryptocurrency whose value is pegged to another asset, such as the U.S. dollar or gold. The benefits and risks of CBDCs depend on their design and issuance, but Bank of America expects central banks in developed economies to focus on payments efficiency and those on developing countries to focus on financial inclusion.