Legal Aspects of Central Bank Digital Currency: Central Bank and Monetary Law Considerations

Legal Aspects of Central Bank Digital Currency: Central Bank and Monetary Law Considerations

Author: Wouter Bossu

Publisher: INTERNATIONAL MONETARY FUND

Published: 2020-11-20

Total Pages: 51

ISBN-13: 9781513561622

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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.


Designing Central Bank Digital Currencies

Designing Central Bank Digital Currencies

Author: Mr.Itai Agur

Publisher: International Monetary Fund

Published: 2019-11-18

Total Pages: 38

ISBN-13: 1513519883

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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 (near) Future of Central Bank Digital Currencies

The (near) Future of Central Bank Digital Currencies

Author: Nicola Bilotta

Publisher: Peter Lang Gmbh, Internationaler Verlag Der Wissenschaften

Published: 2021-02-26

Total Pages: 202

ISBN-13: 9783034342759

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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.


The Rise of Digital Money

The Rise of Digital Money

Author: Mr.Tobias Adrian

Publisher: International Monetary Fund

Published: 2019-07-15

Total Pages: 20

ISBN-13: 1498324908

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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.


Intro to CBDCs

Intro to CBDCs

Author: AXIM

Publisher: ELLARS Studios

Published: 2022-11-21

Total Pages: 79

ISBN-13:

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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.


The Future of Money

The Future of Money

Author: Eswar S. Prasad

Publisher: Harvard University Press

Published: 2021-09-28

Total Pages: 497

ISBN-13: 0674258444

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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.


The Future of Money

The Future of Money

Author: Josh Luberisse

Publisher: Fortis Novum Mundum

Published:

Total Pages: 243

ISBN-13:

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The global financial landscape is on the brink of a monumental shift. Central Bank Digital Currencies (CBDCs) promise to revolutionize the way we think about money, transactions, and economic policy. But what does this mean for the future of finance, and how will it affect you? Authored by a leading expert in finance and technology, ‘The Future of Money: How Central Bank Digital Currencies Will Reshape The Global Financial System’ provides an in-depth exploration of CBDCs and their potential to transform the global economy. Drawing on extensive research and expert analysis, this book delves into the mechanics of CBDCs, their implementation by central banks, and the profound impacts they will have on international trade, financial inclusion, and monetary policy. CBDCs aren't just a new form of money; they are a total overhaul of our financial infrastructure, promising to make transactions faster, cheaper, and more accessible for people everywhere—from bustling urban centers to remote rural communities. But how will these digital currencies affect global trade, privacy, or even the sovereignty of nations? And what can we do to prepare for this imminent financial transformation? "The Future of Money" breaks down complex financial and technical concepts into clear, engaging language, making it accessible to both finance professionals and casual readers interested in the future of technology and money. Drawing on comprehensive research, expert interviews, and case studies, the book explores the potential of CBDCs to democratize financial services and outlines the challenges and opportunities that lie ahead. Whether you're a policy maker, an investor, or simply curious about the future of digital currencies, this book provides everything you need to know about the upcoming shifts in global finance. Prepare to discover: - How CBDCs work, and their potential impact on global economic dynamics. -The technological infrastructure behind digital currencies. -The potential risks and rewards of a digitally dominated financial future. -The benefits and challenges of integrating CBDCs into existing financial systems Strategic insights for businesses, governments, and individuals to navigate the new financial landscape. "The Future of Money" is not just a guide to future changes; it is a blueprint for readers worldwide to understand and navigate the new normal of digital finance. Don't miss out on understanding the future of money—embrace it, with this essential read. With a focus on both the opportunities and challenges presented by CBDCs, "The Future of Money" is an essential resource for financial professionals, policymakers, and anyone interested in the future of finance. Luberisse's authoritative and accessible style makes complex concepts understandable, providing readers with the knowledge they need to navigate the digital transformation of global finance. Prepare to be enlightened and empowered as you explore the cutting-edge of digital finance. Discover how CBDCs could democratize financial services, enhance efficiency, and ensure stability in the global financial system. Whether you're a seasoned finance expert or simply curious about the future of money, this book offers a comprehensive blueprint for understanding and embracing the financial revolution ahead.


The Chicago Plan Revisited

The Chicago Plan Revisited

Author: Mr.Jaromir Benes

Publisher: International Monetary Fund

Published: 2012-08-01

Total Pages: 71

ISBN-13: 1475505523

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At the height of the Great Depression a number of leading U.S. economists advanced a proposal for monetary reform that became known as the Chicago Plan. It envisaged the separation of the monetary and credit functions of the banking system, by requiring 100% reserve backing for deposits. Irving Fisher (1936) claimed the following advantages for this plan: (1) Much better control of a major source of business cycle fluctuations, sudden increases and contractions of bank credit and of the supply of bank-created money. (2) Complete elimination of bank runs. (3) Dramatic reduction of the (net) public debt. (4) Dramatic reduction of private debt, as money creation no longer requires simultaneous debt creation. We study these claims by embedding a comprehensive and carefully calibrated model of the banking system in a DSGE model of the U.S. economy. We find support for all four of Fisher's claims. Furthermore, output gains approach 10 percent, and steady state inflation can drop to zero without posing problems for the conduct of monetary policy.


Casting Light on Central Bank Digital Currencies

Casting Light on Central Bank Digital Currencies

Author: Mr.Tommaso Mancini Griffoli

Publisher: International Monetary Fund

Published: 2018-11-12

Total Pages: 39

ISBN-13: 1484384571

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Digitalization is reshaping economic activity, shrinking the role of cash, and spurring new digital forms of money. Central banks have been pondering wheter and how to adapt. One possibility is central bank digital currency (CBDC)-- a widely accessible digital form of fiat money that could be legal tender. This discussion note proposes a conceptual framework to assess the case for CBDC adoption from the perspective of users and central banks. It discusses possible CBDC designs, and explores potential benefits and costs, with a focus on the impact on monetary policy, financial stability, and integrity. This note also surveys research and pilot studies on CBDC by central banks around the world.