Rapid ongoing progress with digital technologies has increased the prospects for
adoption of new forms of digital money for both domestic and international
transactions. These include central bank digital currencies (CBDCs) and the so-called
global stablecoins (GSCs) proposed by large technological companies or platforms.
This paper explores the complex interactions between the incentives to adopt and use
CBDCs and GSCs across borders and discusses the potential macro-financial effects.
The use of currencies internationally reflects the economic weight of issuing countries
and broader geopolitical factors. In addition, strong network effects and synergies
across the three functions of money (unit of account, means of payment, and store of
value) act as self-reinforcing mechanisms: Once a currency is dominant, it has tended to
stay dominant.

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