Investment Institute
Análisis macroeconómico

Central bank digital currencies: policy and design

  • 17 Marzo 2021 (5 min de lectura)

Key points

  • Central bank digital currencies (CBDC) are designed to allow direct access to a central bank’s deposits also to households
  • Currently, a vast majority of central banks are engaging in CBDC research
  • CBDC is neither a cryptocurrency nor a totally new technology, but rather a natural evolution of money in order to cope with rapid technological progress
  • Design features must be carefully assessed, as to not to interfere with existing monetary goals
  • However, CBDC’s costs and benefits are not limited to the monetary sphere, as they extend into the social and environmental realm
  • Monetary policy and financial stability are key points on the CBDC research agenda
  • Several solutions to financial stability risks have been proposed, particularly solutions based on the concept or quantity rationing or interest rate tiering of CBDC
  • Broader macroeconomic and strategic geopolitical effects (e.g. ‘first-mover advantage’) of CBDC must be accounted for
  • The future co-evolution of traditional and digital currencies is still an open question

This paper discusses the potential benefits and the challenges of central bank digital currencies (CBDC), i.e. collateralised digital currencies issued by a monetary authority. Starting with a brief review of money, we then analyse both the similarities and differences between digital and traditional currencies. We also consider the advantages of a CBDC over a private sector digital currency. While providing a summary of existing relevant research, we highlight the importance of digital currencies for future research in other areas of economics.

Related Articles

Análisis macroeconómico

El impacto desigual de la inflación: Actuación de los gobiernos

  • por David Page
  • 25 Octubre 2022 (5 min de lectura)
Análisis macroeconómico

The economic impact of a Russian gas cut-off

  • por AXA Investment Managers
  • 30 Septiembre 2022 (5 min de lectura)
Análisis macroeconómico

Brazil’s Presidential Election: Familiar names for an uncertain future

  • por Luis Lopez-Vivas
  • 27 Septiembre 2022 (7 min de lectura)

    Advertencia sobre riesgos

    El valor de las inversiones y las rentas derivadas de ellas pueden disminuir o aumentar y es posible que los inversores no recuperen la cantidad invertida originalmente.

    Clientes Profesionales

    El sitio web de AXA INVESTMENT MANAGERS ESPAÑA está destinado exclusivamente a clientes profesionales tal y como son definidos en la Directiva 2014/65/EU (Directiva sobre Mercados de Instrumentos Financieros). Para una mayor información sobre la disponibilidad de los fondos AXA IM, por favor consulte con su asesor financiero o diríjase a la página web de la CNMV