Central Bank Digital Currencies: a proper reaction to private digital money?

The emergence of private digital currencies poses a threat to payment systems and monetary policy because they challenge all functions of money as we know them. In this paper, we focus mainly on the banking and monetary policy issues raised by stablecoins and Central Bank Digital Currencies (CBDCs)....

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Detalles Bibliográficos
Autores: Cesaratto, Sergio, Febrero Paños, Eladio
Tipo de recurso: artículo
Fecha de publicación:2023
País:España
Institución:Universidad de Castilla-La Mancha
Repositorio:RUIdeRA. Repositorio Institucional de la UCLM
OAI Identifier:oai:ruidera.uclm.es:10578/35809
Acceso en línea:https://doi.org/10.4337/roke.2023.04.05
https://hdl.handle.net/10578/35809
Access Level:acceso abierto
Palabra clave:Stablecoins
CBDCs
Endogenous money
Narrow banking
Payment system
Banking intermediation
Financial instability
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spelling Central Bank Digital Currencies: a proper reaction to private digital money?Cesaratto, SergioFebrero Paños, EladioStablecoinsCBDCsEndogenous moneyNarrow bankingPayment systemBanking intermediationFinancial instabilityThe emergence of private digital currencies poses a threat to payment systems and monetary policy because they challenge all functions of money as we know them. In this paper, we focus mainly on the banking and monetary policy issues raised by stablecoins and Central Bank Digital Currencies (CBDCs). We begin by describing the current working of bank-centered payment systems. We next touch upon cryptoassets and focus on the domestic and international impact of stablecoins. We identify two problems with stablecoins: their role in the breakup of uniform currency, and as a source of financial instability due to the lack of a monetary backstop in the event of a run to withdraw funds in adverse situations. We then deal with the pros and cons of CBDCs, whether they are an adequate response to the challenges raised by stablecoins, their possible impact on monetary and banking policy, and some open economy issues. While we do not see major advantages in private digital currencies as a payment system or as an investment, we also do not find any robust motivation for the introduction of CBDCs beyond geopolitical reasons and the oversight of a technological area.Edward Elgar202420242023info:eu-repo/semantics/articleapplication/pdfhttps://doi.org/10.4337/roke.2023.04.05https://hdl.handle.net/10578/35809reponame:RUIdeRA. Repositorio Institucional de la UCLMinstname:Universidad de Castilla-La ManchaInglésinfo:eu-repo/semantics/openAccessoai:ruidera.uclm.es:10578/358092026-05-27T07:36:41Z
dc.title.none.fl_str_mv Central Bank Digital Currencies: a proper reaction to private digital money?
title Central Bank Digital Currencies: a proper reaction to private digital money?
spellingShingle Central Bank Digital Currencies: a proper reaction to private digital money?
Cesaratto, Sergio
Stablecoins
CBDCs
Endogenous money
Narrow banking
Payment system
Banking intermediation
Financial instability
title_short Central Bank Digital Currencies: a proper reaction to private digital money?
title_full Central Bank Digital Currencies: a proper reaction to private digital money?
title_fullStr Central Bank Digital Currencies: a proper reaction to private digital money?
title_full_unstemmed Central Bank Digital Currencies: a proper reaction to private digital money?
title_sort Central Bank Digital Currencies: a proper reaction to private digital money?
dc.creator.none.fl_str_mv Cesaratto, Sergio
Febrero Paños, Eladio
author Cesaratto, Sergio
author_facet Cesaratto, Sergio
Febrero Paños, Eladio
author_role author
author2 Febrero Paños, Eladio
author2_role author
dc.subject.none.fl_str_mv Stablecoins
CBDCs
Endogenous money
Narrow banking
Payment system
Banking intermediation
Financial instability
topic Stablecoins
CBDCs
Endogenous money
Narrow banking
Payment system
Banking intermediation
Financial instability
description The emergence of private digital currencies poses a threat to payment systems and monetary policy because they challenge all functions of money as we know them. In this paper, we focus mainly on the banking and monetary policy issues raised by stablecoins and Central Bank Digital Currencies (CBDCs). We begin by describing the current working of bank-centered payment systems. We next touch upon cryptoassets and focus on the domestic and international impact of stablecoins. We identify two problems with stablecoins: their role in the breakup of uniform currency, and as a source of financial instability due to the lack of a monetary backstop in the event of a run to withdraw funds in adverse situations. We then deal with the pros and cons of CBDCs, whether they are an adequate response to the challenges raised by stablecoins, their possible impact on monetary and banking policy, and some open economy issues. While we do not see major advantages in private digital currencies as a payment system or as an investment, we also do not find any robust motivation for the introduction of CBDCs beyond geopolitical reasons and the oversight of a technological area.
publishDate 2023
dc.date.none.fl_str_mv 2023
2024
2024
dc.type.none.fl_str_mv info:eu-repo/semantics/article
format article
dc.identifier.none.fl_str_mv https://doi.org/10.4337/roke.2023.04.05
https://hdl.handle.net/10578/35809
url https://doi.org/10.4337/roke.2023.04.05
https://hdl.handle.net/10578/35809
dc.language.none.fl_str_mv Inglés
language_invalid_str_mv Inglés
dc.rights.none.fl_str_mv info:eu-repo/semantics/openAccess
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv application/pdf
dc.publisher.none.fl_str_mv Edward Elgar
publisher.none.fl_str_mv Edward Elgar
dc.source.none.fl_str_mv reponame:RUIdeRA. Repositorio Institucional de la UCLM
instname:Universidad de Castilla-La Mancha
instname_str Universidad de Castilla-La Mancha
reponame_str RUIdeRA. Repositorio Institucional de la UCLM
collection RUIdeRA. Repositorio Institucional de la UCLM
repository.name.fl_str_mv
repository.mail.fl_str_mv
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score 15,300724

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