CBDCs and A Farewell to Cash

The European Central Bank and the US Federal Reserve have stated they won’t eliminate physical cash with the introduction of a Central Bank Digital Currency (CBDC). However, recent policy briefs by the ECB and the Bretton Woods Committee advise against paying interest on CBDCs. This approach warrants reconsideration, as there are compelling reasons to not only expedite the introduction of CBDCs but also to consider paying interest on them and eventually phasing out cash.