CBDC
209899034
Tiered CBDC and the Financial System
IT progress and its application to the financial industry have inspired central banks and academics to analyse the merits of central bank digital currencies (CBDC) accessible to the broad public. This paper first reviews the advantages and risks of such CBDC. It then discusses two prominent arguments against CBDC, namely (i) risk of structural disintermediation of banks and centralization of the credit allocation process within the central bank and (ii) risk of facilitation systemic runs on banks in crisis situations. Two tier remuneration of CBDC is proposed as solution to both issues, and a comparison is provided with a simple cap solution and the solution of Kumhof and Noone (2018) Finally, the paper compares the financial account implications of CBDC with the ones of crypto assets, Stablecoins, and narrow bank digital money, in a domestic and international context.
Ulrich Bindseil
235316598
Una introduccion al debate actual sobre la moneda digital de banco central (CBDC) (An Introduction to the Current Debate on Central Bank Digital Currency (CBDC)
<b>Spanish Abstract:/b> Este documento ofrece una vision general sobre el significado de una central bank digital currency (CBDC) que pueda servir de base para una discusion ordenada que permita profundizar en los diferentes aspectos relevantes del debate actualmente abierto sobre este activo financiero digital. El objetivo fundamental es revisar las motivaciones que pueden justificar la emision de CBDC y llevar a cabo un analisis preliminar de sus principales implicaciones, especialmente de las vinculadas a los modelos de CBDC que parecen mas probables, a tenor de las motivaciones de los bancos centrales que, en estos momentos, han avanzado mas seriamente hacia su emision.<br><br><b>English Abstract:/b> This paper provides an overview of the concept of central bank digital currency (CBDC) that may serve as a basis for an ordered discussion and an in depth analysis of the different relevant aspects in the ongoing debate about this digital financial asset. The primary objective is to review the grounds that could warrant issuing CBDC and undertake a preliminary analysis of its main implications, especially those linked to the CBDC models that seem most likely to be adopted, judging by the motivations of the central banks whose issuance plans are currently most advanced.<br><br><b>Note:/b> Downloadable document is in Spanish.
Juan Francisco Rodriguez Ayuso C Pastor Conesa
216188115
Una introduccion al debate actual sobre la moneda digital de banco central (CBDC)
Este documento ofrece una vision general sobre el significado de una central bank digital currency (CBDC) que pueda servir de base para una discusion ordenada que permita profundizar en los diferentes aspectos relevantes del debate actualmente abierto sobre este activo financiero digital. El objetivo fundamental es revisar las motivaciones que pueden justificar la emision de CBDC y llevar a cabo un analisis preliminar de sus principales implicaciones, especialmente de las vinculadas a los modelos de CBDC que parecen mas probables, a tenor de las motivaciones de los bancos centrales que, en estos momentos, han avanzado mas seriamente hacia su emision.
Juan Ayuso Huertas Carlos Conesa Lareo
227257605
Monetary Policy with Reserves and CBDC: Optimality, Equivalence, and Politics
We analyze policy in a two tiered monetary system. Noncompetitive banks issue deposits while the central bank issues reserves and a retail CBDC. Monies differ with respect to operating costs and liquidity. We map the framework into a baseline business cycle model with "pseudo wedges" and derive optimal policy rules: Spreads satisfy modified Friedman rules and deposits must be taxed or subsidized. We generalize the Brunnermeier and Niepelt (2019) result on the macro irrelevance of CBDC but show that a deposit based payment system requires higher taxes. The model implies annual implicit subsidies to U.S. banks of up to 0.8 percent of GDP during the period 1999 2017.
Dirk Niepelt
234723550
Privacy in CBDC technology
Privacy is a key aspect of a potential central bank digital currency system. We outline different technical choices to enact various privacy models while complying with the appropriate regulations. We develop a framework to evaluate privacy models and list key risks and trade offs in privacy design.
Sriram Darbha Rakesh C Arora
235059951
Technology Approach for a CBDC
In this note, we highlight a range of technical options and considerations in designing a contingent system for a central bank digital currency (CBDC) in Canada and explore how these options achieve stated public policy goals.
Dinesh Shah Rakesh C Arora Hanshang Du Sriram Darbha John Miedema Cyrus Minwalla
216317072
CBDC and Monetary Policy
Improving the conduct of monetary policy is unlikely to be the main motivation for central banks to issue a central bank digital currency (CBDC) While some argue that a CBDC could allow more complex transfer schemes or the ability to break below the zero lower bound, we find these benefits might be small or difficult to realize in practice.
Mohammad Davoodalhosseini Francisco Rivadeneyra Yu Zhu
225413669
The Digital Programmable Euro, Libra and CBDC: Implications for European Banks
Existing payment systems get more and more disrupted. As a consequence of the global trend of digitizing payments and generating new business models from the use of blockchain based digital programmable money, several new payment initiatives have been announced recently. Besides "classical" crypto assets, also stablecoins become increasingly important. The announcement of the Facebook initiated Libra stablecoin is mainly perceived as a game changer for the financial sector. Today, also central banks discuss the introduction of their own digital currencies, so called CBDCs. To date, these payment innovations are not sufficiently discussed and analyzed from the perspective of different sectors and industries, as its implications remain unclear since most initiatives have not yet been introduced. At this point, the literature does not sufficiently discuss the implications of these innovations on the financial sector. This paper sheds light on the perception of these payment initiatives by interviewing more than 50 senior experts. In this study, we analyze the impact of digital programmable Euro initiatives, such as the Libra stablecoin, and CBDCs, on banks. We find that both Libra and a Euro CBDC might heavily affect European banks. Experts fear that large scale financial disintermediation of the financial sector could take place, and digital bank runs could be triggered. Besides these risks, our findings suggest that banks also have the opportunity to develop new business models stemming from these initiatives. Therefore, Libra and a CBDC Euro should not only be seen as threats but also as opportunities.
SSRN Electronic Journal
Philipp G Sandner Jonas Gross Lena Grale Philipp M Schulden
235034686
Designing a CBDC for universal access
If the Bank of Canada issues a central bank digital currency, the technology should be designed for universal access.
John Miedema Cyrus Minwalla Martin John Warren Dinesh Shah
219672247
Taking stock: ongoing retail CBDC projects
Raphael A Auer Giulio Cornelli Jon Frost