Author: Mr.Tanai Khiaonarong Publisher: International Monetary Fund ISBN: 1484399609 Category : Business & Economics Languages : en Pages : 43
Book Description
The level and trend in cash use in a country will influence the demand for central bank digital currency (CBDC). While access to digital currency will be more convenient than traveling to an ATM, it only makes CBDC like a bank debit card—not better. Demand for digital currency will thus be weak in countries where cash use is already very low, due to a preference for cash substitutes (cards, electronic money, mobile phone payments). Where cash use is very high, demand should be stronger, due to a lack of cash substitutes. As the demand for CBDC is tied to the current level of cash use, we estimate the level and trend in cash use for 11 countries using four different measures. A tentative forecast of cash use is also made. After showing that declining cash use is largely associated with demographic change, we tie the level of cash use to the likely demand for CBDC in different countries. In this process, we suggest that one measure of cash use is more useful than the others. If cash is important for monetary policy, payment instrument competition, or as an alternative payment instrument in the event of operational problems with privately supplied payment methods, the introduction of CBDC may best be introduced before cash substitutes become so ubiquitous that the viability of CBDC could be in doubt.
Author: Mr.Tanai Khiaonarong Publisher: International Monetary Fund ISBN: 1498301827 Category : Business & Economics Languages : en Pages : 43
Book Description
The level and trend in cash use in a country will influence the demand for central bank digital currency (CBDC). While access to digital currency will be more convenient than traveling to an ATM, it only makes CBDC like a bank debit card—not better. Demand for digital currency will thus be weak in countries where cash use is already very low, due to a preference for cash substitutes (cards, electronic money, mobile phone payments). Where cash use is very high, demand should be stronger, due to a lack of cash substitutes. As the demand for CBDC is tied to the current level of cash use, we estimate the level and trend in cash use for 11 countries using four different measures. A tentative forecast of cash use is also made. After showing that declining cash use is largely associated with demographic change, we tie the level of cash use to the likely demand for CBDC in different countries. In this process, we suggest that one measure of cash use is more useful than the others. If cash is important for monetary policy, payment instrument competition, or as an alternative payment instrument in the event of operational problems with privately supplied payment methods, the introduction of CBDC may best be introduced before cash substitutes become so ubiquitous that the viability of CBDC could be in doubt.
Author: Mr. Tanai Khiaonarong Publisher: International Monetary Fund ISBN: Category : Business & Economics Languages : en Pages : 25
Book Description
Cash use in most countries is falling slowly. On the margin, younger adults favor cash substitutes over cash. For older adults it is the reverse. Revealed preference tied to a changing population age structure seems to be the main influence on the demand for cash and why it is falling. Cash use may continue to fall, and card use (the main cash substitute) may fall by more, if CBDC is issued. The extent of this reduction depends on the demand for retail CBDC and the incentives (primarily transaction fees) that can play a determining role in CBDC adoption and use.
Author: Mr.Tobias Adrian Publisher: International Monetary Fund ISBN: 1498324908 Category : Business & Economics Languages : en Pages : 20
Book Description
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.
Author: Mr.Itai Agur Publisher: International Monetary Fund ISBN: 1513519883 Category : Business & Economics Languages : en Pages : 38
Book Description
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.
Author: Mr.Tommaso Mancini Griffoli Publisher: International Monetary Fund ISBN: 1484384571 Category : Business & Economics Languages : en Pages : 39
Book Description
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.
Author: International Monetary Fund Publisher: International Monetary Fund ISBN: 1513592033 Category : Business & Economics Languages : en Pages : 33
Book Description
Following the companion paper on the new policy challenges related to the adoption of digital forms of money, this paper presents an operational strategy for the IMF to continue delivering on its mandate of ensuring domestic and international financial and economic stability. The paper begins by summarizing the forces driving the adoption of digital forms of money, and the new policy questions that emerge. It then focusses on how the IMF’s core activities and output will need to evolve, including surveillance, capacity development, and analytical foundations. It ends by discusses how the IMF intends to partner with other organization, and to grow and structure internal resources to fulfill this vision.
Author: Mr.John Kiff Publisher: International Monetary Fund ISBN: 151354778X Category : Business & Economics Languages : en Pages : 66
Book Description
This paper examines key considerations around central bank digital currency (CBDC) for use by the general public, based on a comprehensive review of recent research, central bank experiments, and ongoing discussions among stakeholders. It looks at the reasons why central banks are exploring retail CBDC issuance, policy and design considerations; legal, governance and regulatory perspectives; plus cybersecurity and other risk considerations. This paper makes a contribution to the CBDC literature by suggesting a structured framework to organize discussions on whether or not to issue CBDC, with an operational focus and a project management perspective.
Author: Constantin Jitaru Publisher: Constantin Jitaru ISBN: Category : Business & Economics Languages : en Pages : 136
Book Description
In "Central Bank Digital Currencies and the New Economy," readers are taken on an insightful journey through the evolving landscape of money, finance, and technology. From the historical origins of currency in ancient civilizations to the sophisticated digital payment systems of today, this book explores how money has continuously transformed in response to the needs of societies. Now, the world stands at the brink of a new financial revolution—the rise of Central Bank Digital Currencies (CBDCs). As governments and central banks across the globe experiment with CBDCs, this book delves into the motivations, challenges, and opportunities that these digital currencies present. CBDCs represent the next frontier in monetary evolution, merging the benefits of digital technology with the stability and trust associated with central banks. But as they develop, so do the questions: How will CBDCs coexist with traditional currencies? What are the risks to privacy, financial stability, and economic control? How will they affect commercial banks, global trade, and everyday consumers? "Central Bank Digital Currencies and the New Economy" addresses these questions through ten well-researched chapters, offering in-depth insights into the following topics: The Origins of Money: A comprehensive exploration of how money has evolved from barter systems to precious metals, coins, and paper currency, leading to the emergence of digital finance. The History of Central Banking: Examining the role of central banks in modern economies, their historical development, and how they maintain monetary stability. The Shift to Digital Finance: From credit cards to cryptocurrencies, this section traces the rise of digital financial systems and the technological advancements that are reshaping global economies. Cryptocurrencies vs. Central Bank Digital Currencies: A comparative analysis of decentralized cryptocurrencies like Bitcoin and state-issued CBDCs, highlighting their differences, benefits, and challenges. The Benefits of CBDCs: A look at how CBDCs can enhance financial inclusion, reduce transaction costs, improve payment efficiency, and support economic stability. The Risks and Challenges of CBDCs: Delving into the potential drawbacks of CBDCs, including concerns about privacy, cybersecurity, the disintermediation of commercial banks, and regulatory hurdles. The Technological Infrastructure Behind CBDCs: Examining the technology, from blockchain and distributed ledger systems to centralized digital platforms, that will underpin CBDCs. Societal and Ethical Considerations: Exploring how CBDCs may impact privacy rights, social justice, and economic equality, and what ethical issues arise from their adoption. International Cooperation and Global Implications: Analyzing how countries must collaborate to create interoperable digital currencies and avoid financial fragmentation in a global economy. The Future of Money: A visionary outlook on how CBDCs will reshape the global financial system, the banking sector, and the way we use money in the digital age. Written in an engaging and accessible style, this book is an essential resource for anyone looking to understand the transformative power of CBDCs and their potential to redefine economies in the 21st century. Whether you're a student of finance, a policy maker, a business leader, or simply curious about the future of money, "Central Bank Digital Currencies and the New Economy" provides a clear, comprehensive, and forward-looking analysis of the digital currency revolution.
Author: Mr.Tanai Khiaonarong
Author: Mr.Tanai Khiaonarong
Author: Mr. Tanai Khiaonarong
Author: Mr.Tobias Adrian
Author: Mr.Itai Agur
Author: Group of Ten. Committee on Payment and Settlement Systems
Author: Mr.Tommaso Mancini Griffoli
Author: International Monetary Fund
Author: Mr.John Kiff
Author: Constantin Jitaru