Central Bank Digital Currencies: A New Era in Macroeconomics?

CBDCs change the form of money, not the foundations of macroeconomics

The strongest case for calling CBDC a new era is institutional rather than theoretical. Central banks are examining how sovereign money should function when payments, bank deposits, securities and collateral are increasingly digital. A retail CBDC could give the public electronic access to central-bank money, while a wholesale CBDC could help tokenised financial assets settle in central-bank money.

The underlying macroeconomic questions remain familiar. Which liabilities do households and firms hold? How are banks funded? How does the policy rate pass through to deposits, lending and spending? How quickly can funds leave banks during stress? CBDC changes the instruments and potentially the speed of adjustment, but these questions still determine the result.

The effect depends on what CBDC replaces. Substitution from physical cash mainly changes the form of a central-bank liability. Substitution from commercial-bank deposits can reduce bank funding and reserves. Substitution within wholesale settlement systems may have a smaller direct effect on household money demand but a larger effect on securities settlement, collateral use and market infrastructure.

Five earliest selected retail CBDC milestones

The earliest selected cases show that practical CBDC testing did not begin only in major reserve-currency economies. Uruguay conducted an e-Peso pilot in 2017, The Bahamas launched its Sand Dollar pilot in 2019, and Caribbean monetary authorities remained prominent in the next group of milestones.

First five entries in the selected historical dataset

Rank is chronological within this selected dataset. It is not a performance, readiness, adoption or quality ranking.

How CBDCs could affect the macroeconomy

CBDC affects macroeconomic outcomes through identifiable transmission channels. The direction and size of each effect depend on whether the currency is retail or wholesale, whether it pays interest, how much is adopted and what form of money users exchange for it.

CBDC, central-bank balance sheets and bank deposits

The initial balance-sheet effect depends on the asset exchanged for CBDC. A conversion from physical cash changes the composition of central-bank liabilities: banknotes decline and CBDC rises. Because both are central-bank money, this case generally has a smaller direct effect on commercial-bank funding.

A conversion from a bank deposit is more consequential. The customer’s deposit falls, the bank transfers reserves to the central bank, and the central bank records a CBDC liability to the user. The bank loses both a deposit liability and reserve assets unless reserves are replaced through central-bank lending or another operation.

This process does not automatically produce a credit crunch. The final effect on lending depends on the availability and cost of replacement funding, the central bank’s operating framework, capital constraints, loan demand and the scale of CBDC adoption.

Would CBDC make monetary policy more powerful?

A remunerated retail CBDC could provide households and businesses with a directly observable central-bank rate. In principle, changes in that rate could influence bank deposit pricing and money demand more quickly, strengthening policy transmission where deposit rates react slowly.

The same design could increase competition for deposits and make liquidity demand more sensitive to small interest-rate differences. Central banks would need to forecast CBDC demand, reserve demand and conversion flows while keeping short-term market rates aligned with the policy stance.

A non-remunerated CBDC with holding limits would behave more like digital cash. It could improve payment access without becoming a fully fledged interest-bearing alternative to deposits. This reduces some policy effects but can also limit structural migration from banks.

Financial stability: slow and fast disintermediation

Slow disintermediation occurs when users gradually replace bank deposits with CBDC during normal conditions. Banks may face higher funding costs and lower payment-related fee income, although greater competition could also improve services and deposit pricing.

Fast disintermediation occurs during stress. A digital central-bank liability could provide a convenient destination for funds leaving a bank. Electronic transfers already make withdrawals fast, but CBDC could create a particularly direct safe-asset channel.

Possible safeguards include holding limits, transaction limits, zero or tiered remuneration, restrictions on automated conversion and central-bank liquidity facilities. Their effectiveness depends on the payment system, banking structure and user behavior during stress.

Would a CBDC increase inflation?

CBDC is not inherently inflationary. When a user converts cash or a bank deposit into CBDC, the transaction initially changes the composition of money rather than automatically increasing purchasing power.

The inflation effect depends on subsequent central-bank operations, commercial-bank responses, credit creation, fiscal policy and changes in spending. A CBDC could affect inflation indirectly if it materially altered interest-rate transmission, money velocity, fiscal-transfer speed or the size and composition of the central-bank balance sheet.

Retail CBDC is a central-bank liability and would form part of the monetary base. Its treatment in broader monetary aggregates would depend on national statistical definitions and on whether it replaced cash, deposits or another instrument.

Cross-border payments and digital currency substitution

Wholesale CBDC projects often focus on payment-versus-payment, delivery-versus-payment and interbank settlement. Coordinated platforms could reduce settlement delays and principal risk, but technology alone cannot resolve foreign-exchange liquidity, capital controls, legal finality, sanctions screening or anti-money-laundering requirements.

Retail cross-border access creates a different macroeconomic issue. A widely accessible foreign CBDC could become easier to hold than foreign cash or an offshore bank account. In countries with high inflation or weak confidence in domestic institutions, that convenience could accelerate currency substitution.

Central banks can limit these effects through residency rules, wallet limits, identity requirements, restricted cross-border functionality and cooperation between monetary authorities. These measures involve trade-offs between efficiency, privacy, access and monetary sovereignty.

CBDC is not the same as cryptocurrency or instant payments

Methodology

The ranked metric is the month of the first selected officially documented retail or general-purpose CBDC pilot, field test, public rollout, real-transaction test, implementation-stage payment or live issuance for each included project.

The milestone categories remain different stages of maturity. A restricted pilot is not equivalent to nationwide issuance. Every row therefore states the milestone type, and no claim is made that projects at the same date had the same scope.

Month-level values are preserved where the official source does not establish a precise start day. India and Türkiye share the same December 2022 date value and therefore share chronological rank 6.

The historical table does not describe each project’s current status in 2026. Projects may have expanded, changed direction, completed a pilot, paused technical work or moved to a later phase after the milestone shown.

Conflicting media dates were not averaged. Official dates received priority. The dataset contains no adoption forecast, CAGR, readiness index, transaction estimate or modeled projection.

The metric does not measure wallet ownership, transaction value, merchant acceptance, cybersecurity, public demand, financial inclusion, monetary-policy effectiveness or economic growth.

Main table: selected official retail CBDC milestones

Search the projects, filter by broad region or milestone category and change the chronological order. The limit control applies after search, filtering and sorting.

Showing 10 confirmed entries.

Chronological order within the selected research dataset

Rows are historical milestones only. Current project status in 2026 is outside the ranking metric and should not be inferred from chronological position.

Insights from the selected milestone table

What the evidence means

CBDC is best understood as a possible redesign of public money and settlement infrastructure. The BIS survey shows that central banks consider the subject important, while the historical milestone table shows why research and pilot activity must not be confused with widespread adoption.

For macroeconomic analysis, the most important variable is not the launch date. It is the scale and composition of adoption. A retail CBDC that mostly replaces cash may have limited effects on bank funding. A remunerated CBDC that attracts large deposit balances could materially alter bank competition, reserve demand and policy transmission.

Wholesale CBDC may have a larger near-term role in financial-market infrastructure because it can support settlement of tokenised securities and foreign-exchange transactions. Its direct effect on household money demand may be smaller, but changes in settlement efficiency and collateral use can still affect financial conditions.

CBDCs could therefore mark a new era in how sovereign money is delivered and how digital assets settle. Whether they produce a new macroeconomic regime depends on design choices and behavior that most pilots have not yet tested at national scale.

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