Designing a global digital currency

Ronald Balvers and Bill McDonald

Journal of International Money and Finance, 2021, vol. 111, issue C

Abstract: The notion of a global currency is a debate set aside in the past decade as the abstraction saw little potential for realization in a world with heterogeneous governments unwilling to sacrifice seigniorage for optimal design. The technical capability of creating digital currencies, independent of governments, resurrects the discussion and begs the questions of practical design and implementation. Given that price stability is a key feature of currency design, we consider theoretically the issue of pegging a continuously traded digital currency to a periodic measure of inflation. Empirically we identify factors a cryptocurrency might use to create a portfolio mimicking the ideal design.

Keywords: Global currencies; Digital currencies; Cryptocurrencies; Currency design; Bitcoin (search for similar items in EconPapers)
JEL-codes: D83 E31 E42 F30 F33 G18 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0261560620302734
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jimfin:v:111:y:2021:i:c:s0261560620302734

DOI: 10.1016/j.jimonfin.2020.102317

Access Statistics for this article

Journal of International Money and Finance is currently edited by J. R. Lothian

More articles in Journal of International Money and Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().