From Bitcoin to Central Bank Digital Currencies: Making Sense of the Digital Money Revolution

Paulo Rupino Cunha, Paulo Melo and Helder Sebastião
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Paulo Rupino Cunha: Department of Informatics Engineering, University of Coimbra, CISUC, 3004-531 Coimbra, Portugal
Paulo Melo: Faculty of Economics and INESC Coimbra, University of Coimbra, CeBER, 3004-531 Coimbra, Portugal

Future Internet, 2021, vol. 13, issue 7, 1-19

Abstract: We analyze the path from cryptocurrencies to official Central Bank Digital Currencies (CBDCs), to shed some light on the ultimate dematerialization of money. To that end, we made an extensive search that resulted in a review of more than 100 academic and grey literature references, including official positions from central banks. We present and discuss the characteristics of the different CBDC variants being considered—namely, wholesale, retail, and, for the latter, the account-based, and token-based—as well as ongoing pilots, scenarios of interoperability, and open issues. Our contribution enables decision-makers and society at large to understand the potential advantages and risks of introducing CBDCs, and how these vary according to many technical and economic design choices. The practical implication is that a debate becomes possible about the trade-offs that the stakeholders are willing to accept.

Keywords: central bank digital currency (CBDC); bitcoin; cryptocurrencies; digital money (search for similar items in EconPapers)
JEL-codes: O3 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

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