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The central bank issues retail CBDCs, which can be stored and transferred by individuals and businesses. These digital currencies are used for everyday transactions, much like cash but in a virtual format. For example, a person could use a digital dollar stored in their smartphone wallet to purchase groceries, pay bills, or buy gasoline.
Impact on Monetary Policy and Daily Life
Retail CBDCs give central banks a direct tool to influence the economy by adjusting interest rates or controlling money supply. Since the digital currency is held and used by the general public, changes in its availability and usage could have immediate effects on consumer spending and demand.