Central Bank Digital Currency in Historical Perspective: Another Crossroad in Monetary History

Abstract

WE ARE AT a crossroad in monetary history. Advances in technology—digitalization— have led to the development of new forms of financial assets (fintech) and new forms of money (money-like assets). These include virtual (crypto) currencies like bitcoin, stable coins like libra/diem, and central bank digital currencies (CBDC) like the Bahamian sand dollar. The innovations in money (money-like assets) resonate with earlier major shifts in monetary history.1 Three stand out: