Definition ∞ CBDC liquidity refers to the ease with which a Central Bank Digital Currency can be converted into other assets or used for transactions without significant price impact. It measures the availability and accessibility of the digital currency within an economy. High CBDC liquidity ensures efficient settlement and broad acceptance for payments and financial activities. This attribute is essential for the currency’s utility and stability in a digital financial system.
Context ∞ The state of CBDC liquidity is a critical point of discussion for central banks exploring digital currency issuance. Concerns involve ensuring sufficient supply and demand, interoperability with existing payment systems, and its potential impact on commercial bank deposits. Future developments will likely focus on policy frameworks and technological designs that support robust and accessible CBDC liquidity across various use cases.
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