Money and Central Bank Digital Currency

Sayuri Shirai
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Sayuri Shirai: Asian Development Bank Institute

No 922, ADBI Working Papers from Asian Development Bank Institute

Abstract: Money is a financial instrument that fulfills the basic functions as a medium of exchange, unit of account, store of value, and standard of deferred payment. The function as a medium of exchange allows efficient transactions of goods and services among people without forming an inconvenient barter system. The unit of account enables the value of all goods and services to be expressed in common criteria, thereby smoothening the comparison of goods and services and facilitating their transactions. The store of value refers to any asset whose value can also be used in the future because of the ability to maintain its value, thereby enabling people to save to finance their spending at a later date. In addition to these three basic functions, the function as a standard of deferred payment is regarded as an additional important function of money since it enables it to express the value of a debt so that people can purchase goods and services today by paying back debt in the future. To meet these four functions, money must be durable, portable, divisible, and difficult to counterfeit.

Keywords: money; central bank digital currency; cash; digital coins; bank deposits (search for similar items in EconPapers)
JEL-codes: E42 E44 E51 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2019-02-13
New Economics Papers: this item is included in nep-mac, nep-mon and nep-pay
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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