At the macro level, major currencies are already digital, and maintained by central banks. There is no specie or notes moving between bank vaults for most interbank transactions. That's precisely why the United States and Europe are able to nullify Russia's foreign currency reserves as effectively as they can. The only thing Russia has to exchange for most of its USD and Euro holdings is the right to tell the Fed or the ECB to move money from the Russian Central Bank's account at those institutions to some other account. By freezing those accounts, Russia's money effectively ceases to be Russia's.
Consumer transactions are not yet typically digital currency based. Rather, they are digital notations reflecting desired real currency exchanges between and through banks, that happen to increasingly satisfied by digital means. But no specific digital "coin" or bill is moved by my credit card transaction. Yet.
But more robust and ubiquitous CBDCs are inevitable, especially if central bank-independent cryptocurrencies actually start to gain traction as currencies. Central banks and the governments that underwrite them will never permit fiscal policy to be controlled by an independent, non-manageable currency. Governments and central banks use their ability to control the volume of currency, and the cost of acquiring capital to manage economic stability through monitoring and influencing inflation, employment and investment. For them to not be able to do that would be catastrophic (read the economic history of the nineteenth century for a minor key preview of the results). That means they need to be able to control their currencies. If the future of transactions is digital currencies, all the way down to consumer transactions, then central banks will have to issue CBDCs and mandate their use.
BTW, a cryptocurrency, as we currently use the term is, if it actually becomes a currency, only one possible species of digital currency. A CBDC need not be crypto per se. It will use cryptographic techniques for sure, but may not be crypto/blockchain as we understand it.
Finally, note that a CBDC requires ubiquitous reliable digital identities to be workable. A lot of what the banking system does is the work of "know your customer." That's only more important in a full digital currency world.
Consumer transactions are not yet typically digital currency based. Rather, they are digital notations reflecting desired real currency exchanges between and through banks, that happen to increasingly satisfied by digital means. But no specific digital "coin" or bill is moved by my credit card transaction. Yet.
But more robust and ubiquitous CBDCs are inevitable, especially if central bank-independent cryptocurrencies actually start to gain traction as currencies. Central banks and the governments that underwrite them will never permit fiscal policy to be controlled by an independent, non-manageable currency. Governments and central banks use their ability to control the volume of currency, and the cost of acquiring capital to manage economic stability through monitoring and influencing inflation, employment and investment. For them to not be able to do that would be catastrophic (read the economic history of the nineteenth century for a minor key preview of the results). That means they need to be able to control their currencies. If the future of transactions is digital currencies, all the way down to consumer transactions, then central banks will have to issue CBDCs and mandate their use.
BTW, a cryptocurrency, as we currently use the term is, if it actually becomes a currency, only one possible species of digital currency. A CBDC need not be crypto per se. It will use cryptographic techniques for sure, but may not be crypto/blockchain as we understand it.
Finally, note that a CBDC requires ubiquitous reliable digital identities to be workable. A lot of what the banking system does is the work of "know your customer." That's only more important in a full digital currency world.