Would the cost of providing a CBDC be lower than that of cash? The costs of managing cash are due to its physical nature and in a digital world they would disappear. Non-monetary costs, such as households’ shoe-leather costs of finding a cash provider, would also disappear if cash were accessible via the smartphone in our pocket. Hardware and software costs would, instead, increase.
However, digital technology already plays a crucial role in the financial sector. It is used to transfer commercial bank money, to buy and sell securities, and to process information. It is continuously tested and updated and protected against risks, first and foremost cyber risk. The technology needed to transfer digital cash would likely have strong complementarities with the existing digital networks and infrastructure.