Dutch people pay less and less with public money. Central banks issue public money, commercial banks issue private money. Citizens now only have access to public money in the form of coins and banknotes. However, the use of cash is declining in the Netherlands and some other countries. The introduction of CBDC would mean that Dutch households and businesses can hold deposits with De Nederlandsche Bank (DNB) or the European Central Bank (ECB).
In principle, DNB has a positive attitude towards CBDC since we believe it is essential that public money remains available to all. In our Occasional Study, we argue that CBDC can serve as a backup for non-cash payments, promote diversity in the payments market and has the potential to make cross-border payments more efficient. In addition, it can help foster trust in the money system in times of uncertainty. However, CBDC may also increase the risk of a bank run, so proper supply management measures are needed. With our Occasional Study we want to contribute to the public debate on this issue and the policy debate within the Eurosystem.
A new form of public money will have to respond to the wishes of the users, who increasingly pay digitally. As the frontrunner of digital payments in the Eurosystem, the Netherlands could be the perfect testing ground for CBDC experiments.
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