# From Bitcoin to Central Bank Digital Currencies: Making Sense of the Digital Money Revolution
## 5 The Road Ahead  
Although cryptocurrencies supported by Blockchain heavily influenced the momentum for CBDCs, this technology will not necessarily underlie central bank-issued currencies. Decentralization and cryptographic mechanisms are used in Blockchain to remove the need for trusted third parties, but this is not a concern or desire of central banks. Even if they opt for decentralization for resilience, the central banks will always retain control of the CBDC network [54]. Additionally, Blockchains still suffer from scalability issues, which may be a problem for very high transaction rates. Some CBDC pilots have passed up DLTs in favor of other alternatives [9]. Others, such as the Bank of England, are keeping their options open [54]. It is worth noting that, even if central banks decide to use Blockchain technology, the negative externality of high energy consumption will not exist. The Bitcoin network uses a computationally heavy, and, thus, power-hungry, consensus algorithm to ensure the honesty of anonymous and potentially malicious peers. Conversely, in the case of CBDCs, the central banks will retain control of the network [54], hence enabling the use of much lighter and power-efficient consensus algorithms already in use in private Blockchains today. [PERSON] and [PERSON] [92] extensively discuss why cryptocurrencies should not be the model for implementing CBDCs. They highlight the importance of intermediaries in the financial system, centralized control, and the usability of end-user devices, namely for those less technically adept, that may face difficulties in managing complex private encryption keys. Nevertheless, some characteristics of more modern Blockchains--such as smart contracts--may still be appealing in a CBDC scenario. Smart contracts enable the creation of programmable money. Not to be confused with existing mechanisms to automate payments, such as open banking application programming interfaces (APIs), of which the European Union's second Payment Services Directive (PSD2) is an example [93]. Programmable money is about embedding behavior in the money itself; for example, executing payments upon confirmation of the receipt of goods or routing tax payments directly to authorities at the point of sale [54]. Programmable money can be \"designed to flow as easily as email without sacrificing regulatory controls, monetary policy or personal privacy\" [94] (p. 7). It can automatically gain or lose value over time to implement interest [95], travel only to the intended destinations [96], or be valid only for specific acquisitions, such as food [95]. This ability could enforce rules, like those attached to the relief grants that some governments experimented with during COVID-19, meant to be spent in certain ways [96]. These embedded features reduce the fungibility of money but with a purpose, for example, to mitigate misuse. Programmable money may also \"be effective monetary policy instruments to add liquidity quickly to the financial markets\" [97] (p. 2), and several of its possible mechanisms are valuable to mitigate corruption. The electronic nature of CDBC can also improve cross-border payments, which are frequently costly and inefficient. This goal can be achieved by interoperating central bank digital currencies (CBDCs), forming multi-CBDC (mCBDC) arrangements [98]. While no currently active CDBC pilots address interoperability explicitly, some banks have announced the intention to evolve towards mechanisms for cross-border payments [99]. [PERSON] and colleagues [98] claim that compatible standards (e.g., similar regulatory frameworks, market practices, messaging formats, and data requirements) can help achieve these goals, as can interlinking systems via technical interfaces, common clearing mechanisms or related schemes, or even establishing a single multi-currency payment system. At this point, it is not yet clear which alternative will emerge as preferred.