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Sometimes it's due to reputation reasons. Banks don't want to be seen promoting currencies that regulators do not approve of. Many banks are actually trading in private digital currencies. They do these trades privately using SPVs so that the transactions wont be recorded on their balance sheet.

Central banks worry that as finance becomes increasingly digitalised, two things might happen: first physical cash, the anchor of any financial system, will be displaced, and second, private currencies will become popular. Both could reduce the monopoly of sovereign money.

Central Bank Digital Currency? A central bank digital currency, or CBDC, is a digital national currency. Like paper dollars, a CBDC would be a liability of the Federal Reserve. Unlike paper dollars, it would offer neither the privacy protections nor the finality that cash provides.

integrated digital currency depresses bank deposit spreads, particularly during crises, which limits banks' ability to recapitalize following losses. In addition, because banks are less able to rebuild equity after adverse shocks, banks, on average, have lower equity.

Not only does the Fed have no plans to issue a digital currency, but it has repeatedly said it wouldn't do so without authorization from Congress. How one might work?including how closely it might imitate physical cash?is still a wide-open question that can only be answered through research and testing.

As people move toward more electronic or digital forms of payment, it might seem like paper money is on its way toward obsolescence. But experts say that cash will always be around.

Currency prices can be determined in two main ways: a floating rate or a fixed rate. A floating rate is determined by the open market through supply and demand on global currency markets. Therefore, if the demand for the currency is high, the value will increase.

For a central bank, if the actors involved in valuing and distributing the currency are beyond your control, then you've essentially ceded control of monetary policy to those actors and their activities. The system will become susceptible to rapid inflation or deflation.