CBDCS: Transforming the Banking Landscape
CBDCS: Transforming the Banking Landscape

Author(s): Javier Ferrandiz
Subject(s): Politics / Political Sciences, Politics, Economy, Business Economy / Management, Economic policy, Financial Markets
Published by: Университет за национално и световно стопанство (УНСС)
Keywords: Central Bank Digital Currencies (CBDCs); financial stability; digital payments; banking disintermediation; monetary innovation
Summary/Abstract: The emergence of Central Bank Digital Currencies (CBDCs) marks one of the most significant transformations in modern finance. As digital versions of sovereign money issued by central banks, CBDCs aim to merge the efficiency of digital payments with the trust and stability of traditional currency. Over the past decade, technological advances and the rise of cryptocurrencies have accelerated central banks’ interest in creating their own digital alternatives (BIS, 2023). This paper explores how CBDCs could reshape the global financial landscape— offering faster and cheaper payments, promoting financial inclusion, and increasing transparency—while also posing serious challenges for the traditional banking sector (IMF, 2023). By allowing citizens to hold money directly with central banks, CBDCs could reduce deposits in commercial banks, affecting their funding models and liquidity management. Case studies from the Bahamas, Nigeria, China, and the European Union show that success depends on thoughtful design, public adoption, and strong regulatory coordination (ECB, 2022; Central Bank of the Bahamas, 2020). Looking ahead, the expansion of CBDCs seems inevitable, but their impact will hinge on how well innovation is balanced with financial stability (BIS, 2021). If managed prudently, CBDCs could modernize global finance and foster inclusion; if not, they risk disrupting the very foundations of banking as we know it.

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