Comments on “The Implications of Digital Currencies for Monetary Policy and the International Monetary System”

Andrew Rose

Chapter 9 in Digital Currency Economics and Policy, 2020, pp 79-87 from World Scientific Publishing Co. Pte. Ltd.

Abstract: Prof. Andrew Rose (University of California, Berkeley-Haas, ABFER and NBER, and Dean of NUS Business School since 2019 June) commented on Prof. Engel’s presentation. He agreed with the main conclusion that private sector digital currencies would have little immediate effect on monetary policy or the international monetary system. However, the potential of digital currency to increase capital mobility over time may make the choice between fixed exchange rate and monetary sovereignty sharper. Digital currencies may facilitate the loosening of capital controls; however, the effect is very marginal as the volume of cryptocurrencies are small compared to current capital flows. Prof. Rose pointed out that private digital currencies, even in aggregate, constitute less than 2% of worldwide currency and less than 4% of daily foreign exchange transactions. Furthermore, digital payment arrangements like credit and debit cards and Apple Pay have long existed. They have not compromised the effectiveness of monetary policy…

Keywords: Digital Currency; Economics and Policy; Finance; Cryptocurrency (search for similar items in EconPapers)
JEL-codes: G2 O33 (search for similar items in EconPapers)
Date: 2020
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