The Future of Money: A Review on Central Bank Digital Currencies

Bushra Zulfiqar, Faten Moussa and Mahnoor Hanif

Chapter 15 in Digital Banking and Finance:A Handbook, 2025, pp 407-422 from World Scientific Publishing Co. Pte. Ltd.

Abstract: This chapter explores the intricate aspects and consequences associated with central bank digital currencies (CBDCs), which are an emerging subject of interest in both scholarly research and policy deliberations. The chapter presents the rationale for the introduction of CBDCs, which includes the goals of enhancing financial inclusion, improving the implementation of monetary policy and accelerating the development of digital payment systems. Furthermore, the chapter examines scholarly viewpoints on the possible consequences of CBDCs for monetary policy composition and economic stability. The chapter also highlights important areas that require future research, such as exploring an optimal CBDC design that effectively resolves competing objectives as well as conducting empirical analyses of the effects of CBDCs on financing costs and financial stability. Moreover, the chapter emphasizes the importance of conducting country- and region-specific case studies to fully comprehend the complex ramifications of CBDC layout in various social and economic circumstances.

Keywords: FinTech; Digital Era; Financial Industry; Digital Technology; Digital Financial Industry; Digital Finance; Financial Inclusion; Bank Stability; Emerging Economies; Bibliometric Analysis; Digital Finance Revolution; Global Impacts; Digital Innovation; Insurance; Big Data Applications; Digital Assets in Disarray; Forecasting Bitcoin; Machine Learning Approach; Economic Policy Uncertainty; Cryptocurrency; Bank Shares; Digital Age; Corporate Governance; Risks; Rewards; Assets Tokenization; Future of Money; Central Bank Digital Currencies; Bank Innovation; Risk-Taking Perspective (search for similar items in EconPapers)
JEL-codes: G1 G2 G24 M41 O3 O32 O33 (search for similar items in EconPapers)
Date: 2025
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