JAY CULLEN | Professor of Financial Regulation and Head of Law, Criminology and Policing, Edge Hill University;
Research Professor in Law, University of Oslo

This article examines retail central bank digital currencies (CBDCs), a proposed financial technology that central banks around the world are considering implementing. Proponents of such payment instruments argue that they will produce considerable benefits for adopting countries, principally in the fields of competition in payments markets, financial inclusion, and macroeconomic stability. 

This article critically evaluates these purported benefits and finds that many of the claims made in their support do not stand up to scrutiny and could, in fact, be realized without the introduction of a central bank retail payment instrument. More significantly, the benefits cited by proponents of such instruments may produce considerable negative externalities in other domains, particularly in relation to financial stability.