CBDCs and Banks: Moody’s View on a Digital Payment Transformation

The push toward central bank digital currencies (CBDCs) is poised to reshape the profitability landscape for traditional credit institutions and alter their influence within the global financial system. This position comes from a fresh assessment by Moody’s analysts, highlighting how digital monetary instruments could recalibrate cross‑border payments, promote speed, reduce costs, and enhance security for participants worldwide. The report signals a transition that could diminish the earnings banks currently gain from commissions, correspondent banking fees, and possibly foreign exchange transactions as new digital rails gain traction. Moody’s frames CBDCs not merely as an innovation but as a structural evolution in how money moves across borders, potentially reconfiguring the roles of banks and nonbank payment providers alike. The emphasis is on speed, reliability, and lower friction for end users, while acknowledging the strategic shifts required for established financial institutions to adapt to the changing operating environment, including new clearing and settlement infrastructures that minimize the need for traditional intermediaries. The implications extend to regulatory design, central bank governance, and the competitive dynamics among payment service providers as a more interconnected and digitized payment ecosystem takes shape.