The Digital Franc refers to a potential central bank digital currency (CBDC) issued by the monetary authority of a nation that historically uses the Franc as its fiat currency. This digital form of sovereign money would represent a direct liability of the central bank, available to the public or financial institutions. It aims to offer a secure, efficient, and innovative payment instrument, potentially operating on a distributed ledger technology. Such a currency would complement existing physical cash and commercial bank deposits.
Context
The state of the Digital Franc project, like many CBDC initiatives, is primarily in the research and pilot phase, exploring its technical feasibility and economic implications. A key discussion point involves its potential impact on financial stability, monetary policy transmission, and the role of commercial banks. Critical future developments will include further technical experimentation, public consultations, and international cooperation to establish interoperability standards for potential cross-border digital currency transactions.
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