Clifford Chance

Central Bank Digital Currencies and Stablecoins – how might they work in practice?

21 September 2020

The payments landscape is changing rapidly. Central bank digital currencies (or CBDCs) and stablecoins have received growing attention, particularly around Facebook’s announcement of its proposed global stablecoin “Libra” in 2019 and the resulting regulatory backlash. Advocates hail them as the future for payments - an unmatched tool for financial inclusion and limiting financial crime, by linking payments to identity - while critics have concerns around regulatory standards and financial stability (in the case of global stablecoins) and whether the improvements are as impressive or distinct as supporters argue.

In this report we consider how adoption of a global stablecoin or a retail CBDC would look in practice, and explore the legal structures that might be employed.

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