Central bank digital currencies (CBDCs) are digital versions of fiat currencies that are backed and issued by central banks. Here are five ways in which CBDCs could impact the global financial system.

CBDCs might make payments quicker and more efficient because they would do away with the need for intermediaries. Costs could be brought down as a result, along with financial inclusion and an improved global payments system.

Interest rate management

Digital wallets with spending limits

Real-time data

Automated policy implementation

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