Writing about CBDC, John Cochrane makes it clear that he is in favor. He links to my work and writes Dirk Niepelt has written a lot about CBDC theory, including reserves for all in 2015, a recent Vox-EU summary and papers, here with Markus Brunnermeier a JME paper “CBDC coupled with central bank pass-through funding need not imply a credit crunch nor undermine financial stability,” a follow up including “The model implies annual implicit subsidies to U.S. banks of up to 0.8 percent...
Read More »“Dirk Niepelt im swissinfo.ch-Gespräch (Interview with Dirk Niepelt),” swissinfo, 2020
Dirk Niepelt ist der Direktor des Studienzentrums Gerzensee und Professor für Makroökonomie an der Universität Bern. Hier im Gespräch mit Geldcast-Host Fabio Canetg. swissinfo.ch Swissinfo, December 14, 2020. HTML, podcast. We talk about CBDC, the Swiss National Bank, whether CBDC would render it easier to implement helicopter drops, and how central bank profits should be distributed. Dirk Niepelt ist weltweit einer der führenden Forscher auf dem Gebiet der...
Read More »“Dirk Niepelt im swissinfo.ch-Gespräch (Interview with Dirk Niepelt),” swissinfo, 2020
Swissinfo, December 14, 2020. HTML, podcast. We talk about CBDC, the Swiss National Bank, whether CBDC would render it easier to implement helicopter drops, and how central bank profits should be distributed.
Read More »The Economist on CBDC and Disintermediation
The Economist discusses the risk of CBDC-induced bank disintermediation. Their summary of the 2019 paper by Markus Brunnermeier and myself: If people prefer CBDCS, however, the central bank could in effect pass their funds on to banks by lending to them at its policy interest rate. “The issuance of CBDC would simply render the central bank’s implicit lender-of-last-resort guarantee explicit,” wrote Markus Brunnermeier of Princeton University and Dirk Niepelt of Study Centre Gerzensee...
Read More »“CBDC: State of Play, Practical Challenges, Open Issues,” SUERF Webinar, 2020
SUERF Webinar “CBDC: State of play, practical challenges, open issues” with Ulrich Bindseil (ECB) and Morten Bech (BIS). Moderated by Dirk Niepelt. December 4, 2020, 2 pm. Webinar website. Presentation by Morten Bech. Presentation by Ulrich Bindseil. CBDC = MM0GA.
Read More »“Monetary Policy with Reserves and CBDC: Optimality, Equivalence, and Politics,” CEPR, 2020
CEPR Discussion Paper 15457, November 2020. PDF (local copy). 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...
Read More »Central Banks Have Accepted a Future Retail CBDC
Recent indications: BIS: Central banks and BIS publish first central bank digital currency (CBDC) report laying out key requirements (9 October 2020) ECB: A Digital Euro (updated regularly) Bank of Russia: Bank of Russia announces public discussions on digital ruble (13 October 2020) Related recent developments: Digital Dollar Project: The Digital Dollar Project Publishes Nine Pilot Scenarios to Test Elements of a US CBDC (October 2020) Monetative e.V.: Digitales Zentralbankgeld aus...
Read More »Roadmap Towards Enhanced Cross-border Payments
A new report by the Committee on Payments and Market Infrastructures lists 7 types of frictions and 19 focus areas to address these frictions.
Read More »Money and Memory
On Alphaville, Claire Jones and Izabella Kaminska discuss privacy issues related to CBDC. In the background, Kocherlakota’s “Money is Memory” is lurking.
Read More »“Digital Money, Payments and Banks,” CEPR/IESE Report, 2020
Discussion of Antonio Fatás’ chapter in Elena Carletti, Stijn Claessens, Antonio Fatás, Xavier Vives, The Bank Business Model in the Post-Covid-19 World, CEPR/IESE report, London, June 2020. PDF. Antonio’s chapter offers a rich overview of the dramatic changes in the world of money and banking that we have seen in recent years. I focus on two themes: the nature of money and how it relates to these developments, and the government’s response to the structural changes we observe. I...
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