Should PayPal Be Worried About Your Country’s Central Bank?
Digital currency issued by nation states may cut out the middleman. But would that change the world for the better — or the worse?
Is China’s e-CNY coming to your wallet soon?
Photographer: Barcroft Media/Barcroft MediaThe world of money is about to leap into the great unknown of central bank digital currencies. Will it land in a utopia of universal financial inclusion or crash into a dystopia of instability? Perhaps the experiment will upend banking as we know it, or turn out to be one big damp squib, unable to compete even with an existing private network like PayPal Holdings Inc.?
Any of these outcomes are possible. Technology is enabling monetary authorities to give ordinary people access to a kind of electronic cash they have never had before. Digital money won’t feel new: It will offer instantaneity, just like PayPal, Alipay or WeChat Pay do. Like now, the purchasing power will sit in a smartphone wallet tied to a regular bank account, allowing funds to be swept in and out. But unlike now, the balance in the wallet will be sovereign liability. Just like cash.