What we know on Central Bank Digital Currencies (so far)

Shalva Mkhatrishvili and Wim Boonstra
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Wim Boonstra: Special Economic Advisor at Rabobank, Endowed Professor at Vrije Universiteit Amsterdam

No 01/2022, NBG Working Papers from National Bank of Georgia

Abstract: A central bank digital currency (CBDC) is a topic that is only going to gain importance as a couple of nations have recently went line with a retail CBDC system, dozens of them are piloting it and there are even more who actively research the topic. In the process, many studies have already identified several important potential benefits of a CBDC as well as potential risks and costs. As is already well understood, a CBDC introduction can have a profound impact on all three monetary policy, financial stability and payment systems. This paper, trying to be a go-to starting point for those just exposed to the topic, thoroughly reviews all the benefits and risks/costs associated with a CBDC in the current literature as well as underlines key areas of this topic that need more research. In addition, we try to lay some ground for systematizing three-dimensional linkages between benefits, costs/risks and design choices by (i) discussing probable design choices needed for each item in the list of benefits and costs/risks to-be-mitigated and (ii) overviewing what other benefits and cost/risk-mitigation aims these design choices may be in conflict with.

Keywords: Central bank digital currencies; monetary policy; financial stability; payment systems (search for similar items in EconPapers)
JEL-codes: E42 E50 G20 (search for similar items in EconPapers)
Pages: 72 pages
Date: 2022-09
New Economics Papers: this item is included in nep-fdg, nep-mon and nep-pay
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Persistent link: https://EconPapers.repec.org/RePEc:aez:wpaper:2022-01

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