An educated guess might lead you to believe central bank digital currencies (CBDCs) are an invention of recent times, however, history reveals that the very first “CBDC” project was initiated as early as 1993 in Finland with Project Avant that set out to build a single national electronic purse system. The project failed and was sold to commercial banks, but it did sow the seeds for central bank-led payments innovation for the masses.

Money as a unit of value has evolved in various forms over time — from tokens made of stones and metals to coins and paper notes. In recent decades the paradigm has shifted from physical to digital, with physical cash making up for only about 20% or lesser of the money in circulation across various countries. The remainder exists only in digital formats on ledgers and servers of financial institutions.