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Tag Archives: Notes

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...

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Economic Aspects of the Energy Transition

In an NBER working paper, Geoffrey Heal discusses some aspects of the energy transition to come. On infrastructure investments: the likely net investment required to go carbon-free is now as little as $0.179 trillion renewable power from wind and solar PV plants is now less expensive than power from gas, coal or nuclear plants … If it were not for the intermittency of renewables, we would save money by converting to clean power. the social benefits from stopping the CO2 emissions...

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High-Skilled Immigration and Employment at Multinationals

Britta Glennon reports in an NBER working paper that the two go together. Skilled immigration restrictions may have secondary consequences that have been largely overlooked in the immigration debate: multinational firms faced with visa constraints have an offshoring option, namely, hiring the labor they need at their foreign affiliates. If multinationals use this option, then restrictive migration policies are unlikely to have the desired effects of increasing employment of natives,...

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Assar Lindbeck (1930–2020)

Colleague, co-author, visionary. Assar remains a role model. He was curious, open minded, and incorruptible. He didn’t need to prove himself or that he was correct (politically and otherwise), all he wanted was to contribute and learn. He was a generalist, both in economics and beyond. He exposed nonsense and shaped policy. He will be sadly missed. In memory of Assar Lindbeck.

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First Regulated Stablecoin Retail Transaction—at Digitec?

C. Septhon reports in Modern Consensus: The Sygnum Digital Swiss Franc (DCHF), which is pegged on a 1:1 basis with the fiat currency, was used to complete a payment for an Apple iPad at Digitec Galaxus, Switzerland’s largest online retailer. Coinify, a digital currency platform provider, enabled the sale to take place. Sygnum is different from Tether etc. because it is a regulated bank. Accordingly, DCHF corresponds to a monitored currency board.

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Financial Innovation, Central Banks, CBDC

In its annual economic report, the BIS further warms to the idea that CBDC is a key part of central banks’ response to financial innovation. Central banks play a pivotal role in maintaining the safety and integrity of the payment system. They provide the solid foundation by acting as guardians of the stability of money and payments. The pandemic and resulting strain on economic activity around the world have confirmed the importance of central banks in payments. Digital innovation is...

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