Challenges and limitations
The implementation of CBDCs poses several challenges and limitations, including:
- Regulatory frameworks: CBDCs require new regulatory frameworks to ensure that they are managed and controlled by the government.
- Technical challenges: CBDCs rely on advanced technology, which can be vulnerable to cyber attacks and other disruptions.
- Public acceptance: CBDCs require public acceptance and trust, which can be difficult to achieve.
- Inflation: CBDCs could potentially lead to inflation, if the central bank is not careful.
- Financial stability: CBDCs could potentially destabilize the financial system, if they are not managed carefully.