Intro to CBDCs: Central Bank Digital Currencies will give you the relevant history of MONEY and how it may accumulate as a CBDC for the digital age of the future. Countries and banks are thinking about ditching paper money for ALL DIGITAL currencies. This book is for the expert as well as the novice when it comes to money, fiat, crypto, CBDCs, stable coins and more. Learn about how the digital shift could change the world with this AXIM Book.
We study the optimal design of a central bank digital currency (CBDC) in an environment where agents sort into cash, CBDC and bank deposits according to their preferences over anonymity and security; and where network effects make the convenience of payment instruments dependent on the number of their users. CBDC can be designed with attributes similar to cash or deposits, and can be interest-bearing: a CBDC that closely competes with deposits depresses bank credit and output, while a cash-like CBDC may lead to the disappearance of cash. Then, the optimal CBDC design trades off bank intermediation against the social value of maintaining diverse payment instruments. When network effects matter, an interest-bearing CBDC alleviates the central bank's tradeoff.
The value of global cashless payments has been radically increasing worldwide. Despite cash being the most used payment instrument in the world, technological innovation and new consumer preferences are decisively transforming the way consumers pay and manage money. The COVID-19 pandemic may also have been an accelerator of the cashless mega-trend. Private players currently dominate the digital payment ecosystem, urging central banks to seek solutions to ensure public access to legal tender if cash is phased out. In this context, the idea of a Central Bank Digital Currency (CBDC) is gaining momentum. Nevertheless, there is a need to better understand the implications in terms of risks, benefits and potential costs of CBDCs. From privacy concerns to macroeconomic effects, these implications blur the boundaries of the payment and financial systems, challenging the core functions of our economy and society.
This paper marks the launch of a new IMF series, Fintech Notes. Building on years of IMF staff work, it will explore pressing topics in the digital economy and be issued periodically. The series will carry work by IMF staff and will seek to provide insight into the intersection of technology and the global economy. The Rise of Digital Money analyses how technology companies are stepping up competition to large banks and credit card companies. Digital forms of money are increasingly in the wallets of consumers as well as in the minds of policymakers. Cash and bank deposits are battling with so-called e-money, electronically stored monetary value denominated in, and pegged to, a currency like the euro or the dollar. This paper identifies the benefits and risks and highlights regulatory issues that are likely to emerge with a broader adoption of stablecoins. The paper also highlights the risks associated with e-money: potential creation of new monopolies; threats to weaker currencies; concerns about consumer protection and financial stability; and the risk of fostering illegal activities, among others.
This paper analyzes the legal foundations of central bank digital currency (CBDC) under central bank and monetary law. Absent strong legal foundations, the issuance of CBDC poses legal, financial and reputational risks for central banks. While the appropriate design of the legal framework will up to a degree depend on the design features of the CBDC, some general conclusions can be made. First, most central bank laws do not currently authorize the issuance of CBDC to the general public. Second, from a monetary law perspective, it is not evident that “currency” status can be attributed to CBDC. While the central bank law issue can be solved through rather straithforward law reform, the monetary law issue poses fundmental legal policy challenges.
Cryptocurrencies and digital assets are increasingly garnering interest from institutional investors. This is on top of the already strong support in place for cryptocurrencies such as Bitcoin from the retail investor. With this rapid growth has come a series of complex operational and regulatory compliance challenges. These challenges have become further exacerbated by the increasing pace of technological advances in areas such as decentralized finance (DeFi) tokenization, blockchain and distributed ledger technology (DLT) essential to the crypto and digital asset markets. This book will be the first book to provide current and practical guidance on the operational and compliance foundations of crypto investing and asset management. The book will include: · Step-by-step analysis of the modern operational mechanics behind cryptocurrency investment operations · Detailed guidance and example documentation on the procedures launching a crypto fund · Explanation of the operational procedures and compliance requirements for crytpo asset managers · Detailed analysis of crypto anti-money laundering compliance, regulations and laws for cryptocurrencies · Up-to-date analysis of recent crypto case studies, frauds and regulatory enforcement actions · Review of the digital asset landscape including non-fungible tokens (NFTs) and asset tokenization · Current examples of real-world crypto operations policies and compliance manuals · Analysis of the emerging trends in crypto operations and compliance in areas including blockchain, DeFi, crypto lending, yield farming, crypto mining and dApps Cryptocurrency Compliance and Operations will be an invaluable up-to-date resource for investors, fund managers, and their operations and compliance personnel as well as service providers on the implementation and management of best practice operations.
A cutting-edge look at how accelerating financial change, from the end of cash to the rise of cryptocurrencies, will transform economies for better and worse. We think weÕve seen financial innovation. We bank from laptops and buy coffee with the wave of a phone. But these are minor miracles compared with the dizzying experiments now underway around the globe, as businesses and governments alike embrace the possibilities of new financial technologies. As Eswar Prasad explains, the world of finance is at the threshold of major disruption that will affect corporations, bankers, states, and indeed all of us. The transformation of money will fundamentally rewrite how ordinary people live. Above all, Prasad foresees the end of physical cash. The driving force wonÕt be phones or credit cards but rather central banks, spurred by the emergence of cryptocurrencies to develop their own, more stable digital currencies. Meanwhile, cryptocurrencies themselves will evolve unpredictably as global corporations like Facebook and Amazon join the game. The changes will be accompanied by snowballing innovations that are reshaping finance and have already begun to revolutionize how we invest, trade, insure, and manage risk. Prasad shows how these and other changes will redefine the very concept of money, unbundling its traditional functions as a unit of account, medium of exchange, and store of value. The promise lies in greater efficiency and flexibility, increased sensitivity to the needs of diverse consumers, and improved market access for the unbanked. The risk is instability, lack of accountability, and erosion of privacy. A lucid, visionary work, The Future of Money shows how to maximize the best and guard against the worst of what is to come.
An introduction to cryptocurrencies and blockchain technology; a guide for practitioners and students. Bitcoin and blockchain enable the ownership of virtual property without the need for a central authority. Additionally, Bitcoin and other cryptocurrencies make up an entirely new class of assets that have the potential for fundamental change in the current financial system. This book offers an introduction to cryptocurrencies and blockchain technology from the perspective of monetary economics.
