Virtually every central bank is studying the risks and rewards of CBDCs. But there is no consensus on whether those risks and rewards are large or small. Similarly, there is no agreement on the consequences for commercial banking. Will central bank digital currency reside in accounts at the central bank or in electronic wallets outside the central bank? Will central banks maintain digital accounts not only for commercial banks but also for FinTechs, nonfinancial firms, and individuals? If central banks are slow to occupy this space, will the private sector quickly move to fill it? If so, what will be the implications for the conduct of monetary policy and oversight of the payments system?
