The race to become the first major global economy to issue a central bank digital currency (CBDC) has just intensified – with the European Central Bank (ECB) seemingly admitting that when it comes to CBDC launches, it may pay to be first.

These were the findings of a new paper authored by Massimo Minesso Ferrari, an economist in the ECB’s International Policy Analysis Division, and two other ECB CBDC policymakers,

In the paper, Ferrari et al wrote,

“INTRODUCING A CBDC SOONER RATHER THAN LATER COULD GIVE RISE TO A SIGNIFICANT FIRST-MOVER ADVANTAGE TO ITS ISSUER.”

They added that countries without CBDCs would initially find themselves at a distinct disadvantage over others with a bank-issued token, with the former possibly losing control over its own monetary policy – by reacting strongly to “spillovers” caused by shocks in CBDC-issuing regions.

And as investors would be keen to buy up CBDCs, favoring them to bonds and other assets due to their cash-like properties, the effect of these cross-border “spillovers” could be “significant.”

They explained,

“The presence of a CBDC amplifies the international spillovers of shocks to a significant extent, thereby increasing international linkages.”