EXPLORING THE FUTURE OF CENTRAL BANK DIGITAL CURRENCIES (CBDCS) AND THEIR IMPACT ON MONETARY POLICY AND GLOBAL FINANCE

The rapid digitalization of financial systems has intensified global interest in Central Bank Digital Currencies (CBDCs) as a potential evolution of sovereign money. This study examines the future of CBDCs and evaluates their implications for monetary policy effectiveness, financial intermediation, and global financial stability. Using an integrated analytical framework that combines macroeconomic indicators, payment system efficiency measures, and cross-country comparative analysis, the study investigates how CBDC adoption influences monetary policy transmission, banking sector dynamics, and cross-border financial flows. The findings indicate that CBDCs can enhance policy transmission by enabling more direct and programmable monetary tools, improve payment efficiency by reducing transaction costs and settlement times, and support financial inclusion through broader access to digital central bank money. However, the results also highlight significant challenges, including risks of commercial bank disintermediation, cybersecurity vulnerabilities, privacy concerns, and potential disruptions to global currency hierarchies. The study further shows that the macroeconomic and financial outcomes of CBDC implementation are highly sensitive to design choices, regulatory frameworks, and the degree of international interoperability. Overall, the research concludes that CBDCs represent a strategic policy instrument rather than a purely technological innovation, with their success contingent upon careful institutional design, strong governance mechanisms, and coordinated international cooperation.