Welcome to Thoughts on the Market.

I'm Chetanaya, Chief Economist and Global Head of Economics for Morgan Stanley.

Along with my colleagues, bringing your variety of perspectives I'll be talking about the

benefits and disruptive risks arising from central bank digital currencies.

It's Friday, April 30, at 11 a.m. in New York.

The word disruption is not typically associated with central banks, but as central banks

edge closer to introducing their own digital currencies, significant disruption could play

out in the financial system.

Central bank digital currencies, often called CBDCs, are a new form of digital cash intended

to replace physical cash.

Before I go any further, it's important note that digital currencies should not be confused

with cryptocurrencies.

Cryptocurrencies are either packed to an underlying asset like in the case of stablecoins or backed

by a blockchain like Bitcoin.

CBDCs by contrast are just what their name implies.

They are a digital form of currency and will be a liability of the central bank which will

maintain them in a centralized ledger.

It's essentially digital cash.

And why are we talking about CBDCs right now?

Well, efforts to introduce CBDCs are gaining momentum with as many as 86% of world central

banks exploring launching digital currencies.

China has launched pilot trials in a number of cities.

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