Central bank digital currency (CBDC) can fulfil the role of cash as retail public money to help maintain a well-functioning monetary system, a paper from the Bank of Canada (BoC) argues.

BoC researchers Francisco Rivadeneyra, Scott Hendry and Alejandro García say retail public money is essential to the monetary system because it defines the unit of account and supports the uniformity of money.

“A monetary system without retail public money would be prone to fragmentation, where different types of