As the pandemic continues to accelerate the long-term shift away from cash transactions, central banks around the world are seriously considering digital currencies as a way to keep up with digitalisation. But what would a Central Bank Digital Currency (CBDC) look like? How could it change the way we all save and spend money, and what does this mean for the future of commercial banking?

Welcome to another episode of Macro Matters. This week our host Paul Diggle is joined by special guest David Oxley, Senior Economist from Capital Economics. Together with Luke Bartholomew, our in-house Monetary Economist, they discuss whether central banks should issue digital currencies.

Part 1 brings us up to speed on what CBDCs are, how they differ from cryptocurrencies like Bitcoin, and what it would mean in practice for us all to have a bank account with the central bank.

Part 2 discusses the potential costs and benefits of CBDCs, focussing on the consumer and business innovations that could be possible, how CBDCs might change monetary policy, and the future of commercial banks in this brave new world.