The introduction of central bank digital currencies (CBDCs) would make foreign exchange safer and smaller currencies more attractive, analysis from the London School of Economics claims.

In a blog post published on December 4, LSE visiting fellow Ousmène Jacques Mandeng argues that the use of CBDCs could trigger “a collapse” in the foreign exchange life cycle. Adopting such currencies, he says, would enable the instant settlement of payments to take place “atomically”, with both legs of a

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