Transformation of Money in the Digital Age

Fáykiss, Péter and Horváth, Balázs István and Horváth, Gábor and Kiss-Mihály, Norbert and Nyikes, Ádám and Szom­bati, Anikó (2021) Transformation of Money in the Digital Age. POLGÁRI SZEMLE: GAZDASÁGI ÉS TÁRSADALMI FOLYÓIRAT, 17 (Spec.). pp. 124-140. ISSN 1786-6553 (print); 1786-8823 (online)

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Abstract

In the new di­gital age, the trans­form­a­tion of money is in­ev­it­able. Our study fo­cuses on this chal­lenge and the po­ten­tial pub­lic policy re­sponse to it: the concept of cent­ral bank di­gital cur­rency (CBDC). We briefly out­line the his­tor­ical de­vel­op­ment of money and the chal­lenges posed by the cur­rent di­gital trans­form­a­tion for the fin­an­cial sys­tem, es­pe­cially in the area of mon­et­ary policy. In re­sponse to the Fintech and BigTech chal­lenges and the po­ten­tial 'di­gital' dol­lar­isa­tion of na­tional cur­ren­cies, the idea of a cent­ral bank di­gital cur­rency is emer­ging as a grow­ing and al­most un­an­im­ous re­sponse among cent­ral banks. Im­ple­ment­a­tion, however, in­volves a very com­plex set of de­cisions, fraught with design is­sues, chal­lenges and risks. These de­cisions, in turn, need to be driven by gen­eral motives and the spe­cific prob­lems to be ad­dressed. In the con­clud­ing part of our paper, we briefly look at where the in­tro­duc­tion of cent­ral bank di­gital cur­rency is most ad­vanced in the world. Al­though we do not yet see the final full-scale in­tro­duc­tion of CBDC in coun­tries with sig­ni­fic­ant eco­nomic weight, we have no doubt that the evol­u­tion of money will con­tinue in this dir­ec­tion.

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