Over 90 countries are exploring CBDCs to modernize financial systems, driven by the potential to improve payment efficiency, enhance financial inclusion, and maintain monetary sovereignty in an increasingly digital economy where private cryptocurrencies and digital payment platforms challenge traditional banking.

Potential benefits include improved payment efficiency and financial inclusion, as CBDCs could enable instant, low-cost transactions without requiring traditional bank accounts, particularly benefiting unbanked populations. Central banks envision programmable money that could automate tax collection, distribute government benefits more efficiently, and provide real-time economic data for better policy decisions. The technology could also strengthen cross-border payments and reduce reliance on correspondent banking networks.

Privacy advocates raise concerns about government surveillance risks, as CBDCs could provide unprecedented visibility into individual spending patterns and economic behavior. Unlike cash transactions that are inherently private, digital currencies create permanent records that governments could potentially access for monitoring, taxation, or enforcement purposes. Balancing the benefits of digital efficiency with privacy protection and preventing authoritarian overreach remains the central challenge as countries design their CBDC frameworks.