As you can see the time of my post, means I’m restless to understand more on CBDC and how it impacts ” My FX World” !

I’m writing this post more from academic understanding point of view as the whole concept of CBDC still in many respects is  “ New and Evolving” . Belonging to the world of Market’s, I cannot NOT dissect any new development from its implication in the Currency space and so here I am breaking my head over some of the thoughts-
Can CBDC change the nature of liquidity ? I’m concerned with the large capital movements it can entail and its resultant impact on USD/INR esp in times of Risk off ( and we have too many of such events every now and then as recent as pandemic to Oil to Russia to US rate scenario etc )  . In these situations, can an easier conversion of CBDC to dollars enable faster deleveraging and accelerate flight due to risk off resulting in liquidity constraints and sharp movements in USD/INR…

I’m trying to think what could potentially be ring fencing here- If capital controls are put, we go back and it contradicts the whole bond inclusion move ..If we keep it totally free, we mirror convertibity so does this mean an introduction of CBDC is a step towards or rather an adoption of currency convertibility..Some thoughts to ponder on …

Views welcome for some mental stimulation !