A belated reply to this, but eight days after you published this, the Bank of England produced a lengthy 'consultation' , due to close in eight days' time, on the 'key features of a potential model' CBDC, not on whether a CBDC is needed or wanted. It's worth reading if you have the time and inclination, but I'm sure that nothing in it will surprise you. It's ironic that the supposed 'case' for a CBDC is partly based on the numerous forms of electronic payment that are currently available, when they should actually deem CBDC to be superfluous.


My guess as to how CBDC will be implemented is via mortgages and business loans. With base rates now gradually being raised to pre-crash levels (the BoE base rate is currently 4.75% and expected to rise to 5.5%), anyone holding a large amount of debt is in a vulnerable position. In the UK most first-time-buyers get lured into the housing market with a low-interest fixed rate mortgage lasting two or three years, whereupon they will then seek the best deal available, which could just last another two or three years; and so on. It could be that a CBDC loan is the only one available. It would prevent them from withdrawing equity if needed, though it is unlikely that many would want to risk doing so if rising interest rates mean that property prices take a downturn. A CBDC mortgage would also groom those mortgagees to accept CBDC as normal for use in other circumstances.

One other possible area that CBDC could be introduced is if you are lucky enough to get a tax rebate, in the UK from HMRC, in the US I guess that it is from the IRS. That rebate could be time-limited and expire after, let's say, six months if it hasn't been spent. Another obvious area is in welfare payments, which in the UK are rolled up into a package called Universal Credit. It is not yet a Universal Basic Income, but could well be leading into one.

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