CENTRAL BANK DIGITAL CURRENCY (CBDC) AS A THIRD FORM OF MONEY: KEY RISKS AND DEVELOPMENT DIRECTIONS

Abstract

Digital innovation in finance (FinTech) is driving the cryptoasset and cryptocurrencies industry creation, which in turn leads to faster and cheaper payments. Following private digital finance, a regulated currency is emerging – the Central Bank Digital Currency. The development of CBDC has the potential to transform the entire global economy in the long term, reducing existing costs and stimulating its growth through market access to a wide range of participants (IMF, states central banks, ECB). However, such benefits can only be realized if there is a properly designed and regulated CBDC implementation procedure, developed technological and legal protocols and rules. Critical issues will be cybersecurity, compliance with accepted AML & KYC controls, education and training of clients and society in general. There is a need for a strategy of transition to the active use of the third form of money while taking into account the interests of all players involved (at least the client, banking institutions, the state represented by the central bank) and preserving micro and macroeconomic stability.