How to Issue a Central Bank Digital Currency

David Chaum, Christian Grothoff and Thomas Moser

Papers from arXiv.org

Abstract: With the emergence of Bitcoin and recently proposed stablecoins from BigTechs, such as Diem (formerly Libra), central banks face growing competition from private actors offering their own digital alternative to physical cash. We do not address the normative question whether a central bank should issue a central bank digital currency (CBDC) or not. Instead, we contribute to the current research debate by showing how a central bank could do so, if desired. We propose a token-based system without distributed ledger technology and show how earlier-deployed, software-only electronic cash can be improved upon to preserve transaction privacy, meet regulatory requirements in a compelling way, and offer a level of quantum-resistant protection against systemic privacy risk. Neither monetary policy nor financial stability would be materially affected because a CBDC with this design would replicate physical cash rather than bank deposits.

Date: 2021-02
New Economics Papers: this item is included in nep-cba, nep-cwa, nep-mon and nep-pay
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Citations: View citations in EconPapers (12)

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http://arxiv.org/pdf/2103.00254 Latest version (application/pdf)

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Working Paper: How to issue a central bank digital currency (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:2103.00254

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