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Central bank digital currencies: An active role for commercial banks
Journal of Payments Strategy & Systems,
17
(1),
26-35
(2023)
Abstract
With most central banks now exploring central bank digital currencies (CBDCs), commercial banks should be looking to establish their role in this fast-changing landscape. Among the roughly 90 per cent of the world’s central banks pursuing CBDC projects, many, including those in the USA and South Africa, are at the exploratory phase. Others are already managing development projects (the European Union) and pilots (China). The various imperatives behind these initiatives are easy for private actors in these markets to overlook, which sometimes complicates private–public cooperation. However, digitally issued public money stands at the forefront of central bank innovation in the monetary space. This paper reviews why central banks need to explore digital currencies and what questions they should address. It also sheds light on what commercial banks need to consider as they anticipate their stance in the CBDC development process. For both parties, the final section outlines the hurdles to successful CBDC design and rollout.
Keywords: CBDC; digital currency; central banks; commercial bank cooperation; cash 2.0
The full article is available to subscribers to the journal.
Author's Biography
Olivier Denecker is a partner in McKinsey’s Brussels office and McKinsey’s director of knowledge for payments, serving global clients on a wide variety of payment and card-related topics, and advising clients on their complex payments-related issues. He is also a frequent speaker at international payment conferences.
Arnaud D’Estienne is a consultant in McKinsey’s Paris office. He works principally in technology and payment services. His work focuses on projects with global clients supporting their growth journey, from core strategy to ‘tech build’ efforts such as new applications, technological assets and businesses.
Pierre-Matthieu Gompertz is a McKinsey alumnus, and while at the firm, focused on financial institutions and payment/FinTech players, looking specifically at topics that include growth, market strategy and operating model transformation. He has extensive international experience.
Elia Sasia is a partner in McKinsey’s Milan office. He is a core member of the Payment practice taking the role of knowledge expert for Europe on topics such as payment infrastructure, mobile payments, and supply chain finance solutions. Elia has also supported several financial institutions in shaping their payment strategy and their work in cash management and trade finance. He also has a keen interest in the start-up community, leading McKinsey’s ‘Shape the Shapers’ programme in Italy.
