Reserves for All? Central Bank Digital Currency, Deposits, and their (Non)-Equivalence

Dirk Niepelt

No 18.02, Working Papers from Swiss National Bank, Study Center Gerzensee

Abstract: I offer a macroeconomic perspective on the "Reserves for All" (RFA) proposal to let the general public use electronic central bank money. After distinguishing RFA from cryptocurrencies and relating the proposal to discussions about narrow banking and the abolition of cash I propose an equivalence result according to which a marginal substitution of outside for inside money does not affect macroeconomic outcomes. I identify key conditions on bank and government (central bank) incentives for equivalence and argue that these conditions likely are violated, implying that RFA would change macroeconomic outcomes. I also relate my analysis to common arguments in the discussion about RFA and point to inconsistencies and open questions.

Pages: 26 pages
Date: 2018-07
New Economics Papers: this item is included in nep-mac and nep-pay
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Citations: View citations in EconPapers (23)

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Related works:
Journal Article: Reserves for All? Central Bank Digital Currency, Deposits, and Their (Non)-Equivalence (2020)
Working Paper: Reserves for All? Central Bank Digital Currency, Deposits, and their (Non)-Equivalence (2018)
Working Paper: Reserves For All? Central Bank Digital Currency, Deposits, and their (Non)-Equivalence (2018)
Working Paper: Reserves For All? Central Bank Digital Currency, Deposits and their (Non)-Equivalence (2018)
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