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The question arises: How disruptive could CBDCs be? Bank of China, view the shift to digital currency as an
When a fundamental aspect of everyday transactions, opportunity to elevate the international status of their
such as purchasing a cup of coffee, undergoes change, the respective currencies and share of cross-border payments.
effects are likely to be profound.
While CBDC initiatives are not intentionally disruptive,
For instance, commercial banks may face disintermediation, their unintended consequences are poised to reshape the
being excluded from transactions if consumers opt for financial landscape. The pace of disruption will hinge on
non-banking entities. With the launch of a digital currency, the rapid adoption of CBDCs, creating opportunities for
consumers can transfer their bank deposits to CBDC innovation and increasing the potential for unintended
accounts within central bank limits. The technological consequences in the financial system.
infrastructure of CBDCs could also facilitate the entry of
new nonbank entities into the payment space, intensifying The key distinction between CBDCs and existing
competitive pressures on commercial banks. electronic central bank money lies in accessibility. Existing
electronic central bank money is exclusively available to
Another area of impact could be transaction data. A tug of financial institutions, such as direct participants in the
war is expected between consumers desiring anonymity payment system. In contrast, CBDCs would be accessible
and innovative fintech companies creating incentives to businesses and individuals.
for users to adopt their platforms, generating valuable
user transaction data. Fintech success could lead to a Central bank money, such as CBDCs, is considered a
proliferation of network effects, enabling them to gain more secure form of currency compared to commercial
market share against traditional banks. bank money held in a bank account. This is attributed to
the central bank's ability to create additional money as
CBDCs might also disrupt the international payment needed, in contrast to the risk of a commercial bank facing
system. A country with a widely accepted CBDC for insolvency.
international transactions could enjoy significant
advantages in financing costs and control over financial Sofia Sadiq is the ATM Industry Association's international advocacy and
transactions, akin to the privileged role of the U.S. dollar content manager. For information about ATMIA, an independent, non-
today. Central banks, such as the ECB and the People's
profit trade association, and its mission, please visit www.atmia.com.

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