Foreseeable Transformations in Central Banks and their Independence

The Global Financial Crisis inaugurated a profoundly transformative period for central banks and their independence. Two decades, with crises alternating with a new normal and eventually resulting in an inflation surge, and with multiple changes in the economic context and the contents and interactions of macroeconomic policies. Central banks grew in power, and economic and political centrality, while keeping their not-so-old independence credentials.Still, such external and internal transformations are not the end of history for central banking. Three underdoing transformations, of unknown outcomes, have the potential to further transform the role, power, legitimacy, and future of independent central banks. The first is the evolution of the current inflationary macroeconomic context. The second is the digitalization of money, with the emergence of cryptocurrencies, stablecoins, and central bank digital currencies. The third is the change in the international order, including in the monetary and financial system, potentially towards a multipolar, less dollar-dominated, and less open system.This paper briefly introduces those three trends, their potential future courses, and their potential impact on central banks and their independence. While certain scenarios would jeopardize central bank independence, others would reinforce its importance, particularly if it is framed in an alternative model of pluralistic independence