Central bank digital currencies (CBDCs) have come to the fore in recent years,  developing organically alongside the steady decline in the transactional  use of cash, the rise of cryptocurrency and the emergence of financial  technology. Many scholars and policymakers note both exciting benefits  and potentially worrying consequences. CBDCs seek to offer a central bank￾issued fiat currency in digital form. In essence, CBDCs are the digitisation of  the bank note in a user’s wallet. CBDCs are envisioned to come in two forms:  retail, aimed at consumers, and wholesale, aimed at financial institutions. 

Numerous governments are assessing the utility of CBDCs, with some  conducting pilot trials. However, concerns over the impact of CBDCs  feature prominently in current discourse, with analyses noting risks such  as reduced privacy, a single point of failure, banking disintermediation  leading to a reduction in the availability of credit, and even the potential for  external foreign interference in domestic payments. This paper examines  the international security risks posed to the UK by foreign retail and  wholesale CBDCs.