European Central Bank paper explores CBDC fees and conditions for success
There’s a tendency among consumers to think of CBDCs as simply digital money and assume that the same conditions which apply to notes and coins will also apply to these central bank digital currencies. However, a December paper by the European Central Bank shows why such a mindset is a mistake.
Titled ‘Central Bank Digital Currency: functional scope, pricing and controls,’ the paper by Ulrich Bindseil, Fabio Panetta, and Ignacio Terol covered many questions. Yet, it also raised the matter of whether the CBDC would be sustainable without a fee or cost recovery structure.
The paper observed,
“With cash, merchants do not face any per-transaction fee. Nor do they require any acceptance device. This may not be the case for CBDC.”
It further added,
“…
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