The writer is a visiting fellow at the London School of Economics and Political Science and a senior adviser at Accenture. He has advised several CBDC projects.

In the late 19th century, there was controversy in England over what some saw as a usurper to the established monetary order — paper banknotes. At the time, the use of paper currency to complement gold and silver coins was seen by opponents as unduly disruptive and prone to causing instability.

During 1891, the Financial Times reported that banknotes in England, unlike in Scotland, were met with such suspicion that it was difficult to use them in day-to-day payments.

A similar debate is under way on the development of central bank digital currencies, which is gathering pace around the world. CBDCs are set to transform how payments can be conducted. About 11 countries have launched a CBDC, while 17 are running a pilot programme on them, according to a tracker from the Atlantic Council. A further 33 have one under development and 39 are carrying out research on CBDCs.

But some CBDC critics say they are not needed because the current system works, and they may bring unforeseen risks. This seems short-sighted, not taking into account future payment needs.

The case for CBDC is a pragmatic one. They extend what central bank money can do, enhancing its utility to ensure it remains future proof. Part of a broader trend towards increasing diversification in payments, CBDCs support financial innovation and promote…