Central Bank Digital Currencies (CBDCs) have become well-established as a major talking point in the academic mainstream and geopolitics — not to mention the crypto community and its rowdy public discourse on X. While national leaders and supranational financial institutions such as the World Bank and International Monetary Fund have come to a broad consensus that CBDCs stand to provide great benefits, very little has been said detailing where CBDCs are best designed to provide support, and where their adoption may be, so to speak, out of bounds.
In order for CBDCs to have a net positive effect on the global economy, it is imperative for global leaders to recognize their advantages and limitations. CBDCs can help central bankers to implement more effective capital controls, stimulus plans, and other forms of monetary policy as they issue debt to banks — that is, at the wholesale level.