Template-Type: ReDIF-Article 1.0

Author-Name: Janos Muller
Author-Workplace-Name: Hungarian Banking Association
Author-Email: mullerj1@t-online.hu

Author-Name: Adam Kerenyi
Author-Workplace-Name: Institute of World Economics
Author-Email: kerenyi.adam@krtk.mta.hu


Title: The Rise of Central Bank Digital Currencies

Abstract: The revolutionary rise of digital financial innovations has heralded a new era in
the operation of the banking system and central banks, which has brought about
the digital transformation of money. Central banks must respond to challenges
profoundly affecting and transforming the financial system. Central banks have
been exploring the introduction of central bank digital currency (CBDC), in order
to promote stability and sustainable development, to preserve competitiveness
and to bolster the effectiveness of their monetary policies. In addition to smooth
operation, the preservation of sovereignty and the effectiveness of the monetary
policy also need to be ensured. Along with its expected advantages, the paper also
discusses the risks relating to CBDC. CBDC appears in the international financial
system, generating competition among global currencies. The rivalry between
the dollar, the euro and the yuan may alter positions in the global financial
system. A rearrangement of international power relations is at stake. Against this
background, the paper also provides insight into Hungarian news on preparations
for the introduction of CBDC.

Classification-JEL: E3, E5, G1
Keywords: central bank digital currency, means of payment, store of value, crossborder transfers, financial stability
Pages: 122-148
Volume: 21
Issue: 3
Year: 2022
File-URL: https://en-hitelintezetiszemle.mnb.hu/letoltes/fer-21-3-ove1-muller-kerenyi.pdf
File-Format: Application/pdf
Handle: RePEc:mnb:finrev:v:21:y:2022:i:3:p:122-148