Tag Archives: Reserves for all

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...

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...

In the NZZ, Matthias Müller reports how China’s CBDC plans progress: In China beginnen nun im Viertel Xiangcheng, das zu der unweit von Schanghai gelegenen Millionenstadt Suzhou gehört, in einem geschlossenen System erste Tests. … Die PBoC dürfte ein zweistufiges System entwickelt haben. Auf der ersten Ebene wird die digitale Währung an die Geschäftsbanken ausgegeben. Auf der zweiten Ebene können dann die Haushalte und Unternehmen den digitalen Yuan abheben und verwenden. … In Suzhou...

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.

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.

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...

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...

The Korean newspaper Workers cites the VoxEU column in which I argued that “Libra paves the way for CBDC.”

My VoxEU column now also on finews and World News Monitor, September 17, 2019. Digital currencies involve tradeoffs. Libra resolves them less favorably than other projects, and less favorably than CBDC. When confronted with the choice between the status quo and a new financial architecture with CBDC, most central banks have responded cautiously. But Libra or its next best replica will take this choice off the table – the status quo ceases to be an option. The new choice for monetary...

VoxEU, September 12, 2019. HTML. Digital currencies involve tradeoffs. Libra resolves them less favorably than other projects, and less favorably than CBDC. When confronted with the choice between the status quo and a new financial architecture with CBDC, most central banks have responded cautiously. But Libra or its next best replica will take this choice off the table – the status quo ceases to be an option. The new choice for monetary authorities and regulators will be one between...