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Central Bank Digital Currency: A Primer

Author(s): Christian Pfister

Date published: Mar 2020

SUERF Policy Note, Issue No 143
by Christian Pfister, Banque de France

JEL-codes: E40, E42, E52, E58.
Keywords: Central bank, currency, digitalisation, financial stability, monetary policy.

The author documents the benefits, costs, difficulties and risks associated with the potential implementation of a central bank digital currency (CBDC), whether on a wholesale basis, i.e. accessible to designated financial institutions, or on a retail, i.e. universally accessible, basis. He takes deliberately a perspective that is a euro area one and is more practical than that typically adopted in CBDC-related work. He looks first at the potential reasons for issuing a CBDC. He then considers technical and operational aspects. He refers to the legal framework as a third step. He eventually addresses the macroeconomic, monetary and financial consequences. Wherever appropriate, he draws a distinction between the wholesale and retail versions of CBDC, since it is possible to dissociate issuance of one type from the other. He concludes that the retail version, that has attracted most attention, is also the one that raises thornier issues and for which the need seems less pressing in developed economies.
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SUERF Policy Note, Issue No 143SUERF Policy Note, Issue No 143

Central Bank Digital Currency: A PrimerWeb version: Central Bank Digital Currency: A Primer

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