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Central bank digital currency: institutional issues

Author(s): Wim Boonstra

Date published: Sep 2019

SUERF Policy Note, Issue No 101
by Wim Boonstra, RaboResearch and Free University Amsterdam

JEL-codes: E4, E5.
Keywords: CBDC, central banks, money, monetary policy, banking, supervision.

The debate about the introduction of central bank digital currency (CBDC) is gaining momentum. There is a whole series of publications on this topic, among others from the Bank for International Settlements (BIS) and SUERF, which also has organized a seminar on the topic in June 2018. The proceedings of this conference give a good overview of the most important issues around CBDC, including the many possible faces of CBDC, the technological possibilities and difficulties, and monetary issues that are involved here.

The discussion is heating up in the Netherlands as well. Especially since an important government advisory body ,the Netherlands Scientific Council for Government Policy (wetenschappelijke raad voor het regeringsbeleid, or “WRR”), has recommended that people should be given a payment account with the central bank, many people think that CBDC is just over the horizon. However, many CBDC-proponents may be disappointed, as the introduction of CBDC could have far-reaching consequences for both financial stability and the position of central banks. Moreover, although the running debate has touched on many potential consequences of CBDC, it appears that some institutional issues so far have been more or less overlooked. High time to add some new elements to the discussion of this subject.

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SUERF Policy Note, Issue No 101SUERF Policy Note, Issue No 101

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