that CBDC could reduce frictions between payment systems and increase the speed of transactions while ensuring their finality, for example by achieving delivery versus payment in securities transactions.6 It has also been argued that interest-bearing retail CBDC might boost monetary policy efficiency.
CBDC can provide the central bank with an additional instrument – the rate of interest it carries.7 Some have even floated the idea of doing away with paper money altogether so that central banks can lower interest rates to significantly less than zero without triggering a rush into cash.8 But let me be clear: central banks are not intending to abolish cash, and the Eurosystem is strongly committed to the continuance of euro banknotes and coins.