Central bank digital currencies : the future backbone of the international payment system?

Due to the increasing role of digital payments, demand for commercial bank money and nonbank money is expanding, while that for physical cash is sharply diminishing. The retail central bank digital currency (CBDC) is considered the only safe alternative to compensate for this decrease, as a public good complementary to cash that can be used by the general public. It is seen also as a response to the surge of private digital currencies, which could threaten national monetary sovereignty. Complementarily, in parallel to the retail public digital currency, wholesale CBDC targets large-value interbank transactions, limited to selected financial institutions, focused on efficiency, security and lowering transactions costs for cross-border transactions. Based on the extensive literature review and a qualitative synthesis, the present paper has as a key objective the interpretation of the main approaches to the retail CBDC adoption, justified by specific motivations. The research question is "in which circumstances should a retail CBDC be adopted?". The historical perspective of failed projects, combined with current experiences, offers a clear overview of the CBDC as a potential dominant currency of the digital economy, but in the presence of a cautious approach.