Why Central Banks Want To Get Into Digital Currencies?

Central banks want to get into digital currencies because they want to keep control over money and how it works.

Imagine you have a piggy bank where you save your allowance. Now imagine that instead of just coins and paper, your piggy bank could also hold digital coins, like a special kind of app on your phone. These are called central bank digital currencies, or CBDCs for short.

Right now, when you use your allowance to buy candy, the store might take paper money or even let you pay with a card. But if the piggy bank could talk to the store directly, it would be easier and faster, like sending a message instead of counting coins.

Central banks want this kind of digital piggy bank so that they can keep track of how money moves around, just like how your parents know when you take out some allowance. This helps them make sure everything stays fair and works well, even if everyone starts using digital coins all the time.

Also, if something goes wrong with regular money, like if people stop trusting paper bills, having a digital option means they can still use their piggy bank without any trouble!