Central bank digital currencies (CBDCs) are becoming an increasingly popular topic in financial and economic discussions across the globe. CBDCs are a type of digital currency that is ultimately backed by a country’s central bank, and they have the potential to fundamentally change how individuals and institutions do business.

While the idea of a digital currency backed by a central bank may seem like a no-brainer, the implications of CBDCs reach far beyond just providing yet another means of payment. Here, we’ll explore some of the significant social and political implications of CBDCs that we can expect to see in the coming years.

1. Increased Financial Inclusion

One of the most significant social benefits of CBDCs is the potential for increased financial inclusion. By providing access to digital currency and, in theory, eliminating the need for a physical bank account, CBDCs could potentially allow millions of people who are currently “unbanked” to participate in the global economy.

In addition, CBDCs could also bring down some of the significant costs associated with remittances, making it easier for people in developing countries to receive and send money to loved ones around the world.

2. More Privacy Concerns

While CBDCs could make financial transactions more accessible, they could also raise new privacy concerns. With CBDCs, central banks would have complete visibility into all transactions occurring within their economies, which raises questions about how they would use this information.

In addition, CBDCs would likely increase the need for digital identity verification, which could give governments and corporations even more control over individuals’ lives.

3. Possible Negative Impact on Commercial Banks

CBDCs also have the potential to drastically reduce the role of commercial banks in the economy. With CBDCs inherently backed by central banks, individuals and institutions may begin to bypass commercial banks altogether, potentially impacting their profitability and influence.

On the other hand, CBDCs could also provide a benefit to commercial banks by streamlining transactions and reducing the risk of transaction fraud.

4. Increased Central Bank Power

With CBDCs, central banks would have more power than ever before over the economy. Essentially, CBDCs would provide the central bank with a direct line of access to every transaction made within the economy.

This level of control and visibility could allow central banks to enact monetary policy changes in real-time, potentially improving the efficiency and effectiveness of economic interventions. However, this power could also give central banks too much influence over the economy, potentially leading to unrest and political backlash.

5. Potential for Increased Global Cooperation

Finally, CBDCs could facilitate increased global cooperation on economic issues. With CBDCs, central banks could more easily coordinate their monetary policies, potentially avoiding some of the conflicts that have arisen in the past.

Additionally, CBDCs could help in the fight against money laundering and other forms of financial crime, as transactions could be more easily traced across borders.


Overall, CBDCs offer both promise and potential risks. While they could help increase financial inclusion and improve the efficiency of the global economy, they could also raise new privacy concerns and shift the balance of power in the financial sector.

As such, it’s essential that policymakers and regulators carefully consider both the potential benefits and drawbacks of CBDCs as they adopt this new technology. Only then can we ensure that CBDCs live up to their potential and benefit all members of society.