Central Bank Digital Currency (CBDC): Design, Implementation, and Global Implications in the Digital Era

This paper explores the design, implementation, and global implications of Central Bank Digital Currencies (CBDCs), focusing on public digital currencies of China, the United States, and the European Union. As economies digitize, the potential of CBDCs to transform payment systems and financial structures becomes increasingly significant. China’s digital yuan (e-CNY) aims to enhance domestic financial control and extend its international influence, though its centralized nature and data privacy issues pose challenges. The United States adopts a cautious approach, focusing on maintaining the dollar’s dominance and exploring stablecoins as interim solutions. The European Union’s digital euro project prioritizes privacy and financial stability, aiming to safeguard the euro’s role within the union. The competition to set international CBDC standards is intensifying, with potential fragmentation posing risks to global financial efficiency. It is expected to CBDC standard blocs to emerge along geopolitical conflicts. The future of CBDCs holds promise for enhanced payment efficiency and financial inclusion but requires overcoming significant technological, regulatory, and trust risks. This is why the careful design, and meticulous preparations are needed. This paper concludes that the strategic approaches of major economies will shape the future of global finance. Digital won should be designed with considerations for both the domestic stability of the financial system and these global circumstances.