Modernizing Financial Markets (wCBDC)

Overview: Central bank money (CeBM) is crucial for interbank payments and securities transactions because it is virtually free of credit and liquidity risk, enables institutions to reach settlement finality and promotes financial stability. CeBM is ideal for systemically important transactions despite the emergence of alternative payment instruments. Wholesale central bank digital currency (wCBDC) is a form of CeBM that could unlock new economic models and integration points that are not possible today. wCBDCs promise to preserve the role of CeBM as a credit risk-free payment instrument by providing a foundational layer for digital payments in the next generation of financial markets.