Central bank digital money risks being an ‘expensive failure’

Central-bank-issued digital currencies run the risk of turning into a costly waste of time, according to the Centre for European Reform.

Europe --one of the most advanced economies considering the initiative - should instead use regulation to make payments cheaper and more competitive, the London-based think-tank said Tuesday in a report. It warned that the cost benefits and privacy incentives of a so-called CBDC are unlikely to be sufficient to entice consumers to use it.

“Without widespread adoption, a CBDC will be an expensive failure, and will do little to advance central banks’ goals,” senior research fellow Zach Meyers said. “The EU shouldn’t be distracted by the prospect of a digital euro - which may sound impressive and exciting, but may give Europeans few benefits they can’t enjoy already.”