COVID-19, central bank digital currencies, and other payments instruments
Through CBDC, governments could send direct payments much more rapidly than through checks or tax refunds and could provide geographically and temporally targeted relief. The CBDC supporting infrastructure would also enable fund receivers to make payments and transfers seamlessly to other CBDC holders and/or non-CBDC holders, anywhere and anytime across the economy. CBDC could reinforce the resilience of a country’s retail payment services, especially in those cases where private sector infrastructures are disrupted, due to technical problems, personnel unavailability, or inability of service providers to operate. The ‘programmability’ of CBDC could be used to monitor and control how, when, and where recipients utilise the funds. Finally, CBDC could enable people to substitute for cash and in-person payment methods when social distancing is required, or if the use of cash plummets as people worry about germs. Still, CBDC projects will take time to materialise, and meanwhile existing infrastructures could be improved to facilitate transfers and payments.
