International Journal of Central Banking. PDF. This paper offers a macroeconomic perspective on the “Reserves for All” (RFA) proposal to let the general public hold electronic central bank money and transact with it. I propose an equivalence result according to which a marginal substitution of outside money (e.g., RFA) for inside money (e.g., deposits) does not affect macroeconomic outcomes. I identify key conditions for equivalence and argue that these conditions likely are...
Read More »Censorship Resistant Payment Technologies
On Coin Center’s blog, Matthew Green and Peter van Valkenburgh write: Censorship resistance is the only way to guarantee that a digital asset truly is “bearer” and can be sent directly from one person to another without reliance on a third party. Cryptocurrencies achieve this property by making network participants (miners) compete for the power to add transactions to the ledger. Even if some miners wish to censor a transaction, we assume that others will not, particularly if it means...
Read More »Marshall Islands CBDC
The Marshall Islands CBDC project moves forward. Algorand, the project partner, reports that blockchain for the world’s first national digital currency, the Marshallese sovereign (SOV), will be built using Algorand technology. The SOV will circulate alongside the US dollar and help the Marshall Islands efficiently operate in the global economy.
Read More »On the Future of Payments and Settlement
In its Quarterly Review, the BIS offers nice perspectives on the future of payments. Morten Bech and Jenny Hancock survey innovations in payments, and where the problems lie. Tara Rice, Goetz von Peter and Codruta Boar examine the fall in the number of correspondent banks. Morten Bech, Umar Faruqui and Takeshi Shirakami discuss cross border payments. Morten Bech, Jenny Hancock, Tara Rice and Amber Wadsworth discuss securities settlement. And Raphael Auer and Rainer Böhme explore design...
Read More »e-krona Pilot
The Riksbank starts a pilot project with Accenture to develop a technical solution for a retail e-krona. Users shall be able to hold e-kronor in a digital wallet, make payments, deposits and withdrawals via a mobile app. The user shall also be able to make payments via wearables, such as smart watches, and cards. The pilot runs for a year, on a distributed ledger, according to the Riksbank’s press release. More detailed information is contained in this note.
Read More »“Цифровые деньги и цифровые валюты центральных банков: главное, что нужно знать,” Econs, 2020
Econs (a non-profit project of the communications department of the Russian central bank), February 13, 2020. HTML. Russian version of my VoxEU column on digital money and CBDC. What are we actually talking about? What do we know? And what should policymakers do? I discuss the following points: Finance has been digital forever – what’s new about ‘digital money’? Does the nature of money change? What is central bank digital currency? What is the link between CBDC and the blockchain? Would...
Read More »“Digital Money and Central Bank Digital Currency: An Executive Summary for Policymakers,” VoxEU, 2020
VoxEU, February 3, 2020. HTML. What are we actually talking about? What do we know? And what should policymakers do? I discuss the following points: Finance has been digital forever – what’s new about ‘digital money’? Does the nature of money change? What is central bank digital currency? What is the link between CBDC and the blockchain? Would CBDC have macroeconomic effects? Would CBDC foster bank disintermediation and bank runs? Why consider CBDC at all? What opportunities does CBDC...
Read More »Central Banks Zoom In on CBDC
According to a BIS press release, several leading central banks collaborate with the BIS on matters relating to the introduction of CBDC: The Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Sveriges Riksbank and the Swiss National Bank, together with the Bank for International Settlements (BIS), have created a group to share experiences as they assess the potential cases for central bank digital currency (CBDC) in their home...
Read More »Digital Dollar Project
Accenture, the Digital Dollar Foundation, and FTI Consulting are pushing for a digital USD. They have formed the Digital Dollar Project to advance exploration of a United States Central Bank Digital Currency (CBDC). The purpose of the Project is to encourage research and public discussion on the potential advantages of a digital dollar, convene private sector thought leaders and actors, and propose possible models to support the public sector. The Project will develop a framework for...
Read More »Central Banks Zoom In on CBDC
According to a BIS press release, several leading central banks collaborate with the BIS on matters relating to the introduction of CBDC: The Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Sveriges Riksbank and the Swiss National Bank, together with the Bank for International Settlements (BIS), have created a group to share experiences as they assess the potential cases for central bank digital currency (CBDC) in their home jurisdictions. The group...
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