In this paper, I will dissect the prospective impact of retail central bank digital currencies with reference to the hierarchy of credit in modern monetary economies. If central banks decide to issue digital currencies in a similar manner to their issuance of cash, public money will become more widely accessible and potentially threaten the business model of commercial banking. Thus, considerations about financial stability need to be critically assessed to ensure that central bank digital currencies can become a positive addition to monetary environments.
Being a literature review, this paper will thoroughly revise existing accounts on a variety of challenges and chances regarding a transformation of current structures before discussing these findings. This approach will demonstrate that central bank digital currencies provide a benefit to society and strengthen the monetary sovereignty of the central bank without jeopardizing financial stability.
Table of Contents
Abstract
Abbreviations
I. Introduction
II. Research Design
III. Money and banking in modern economies
A. Key actors
B. What is money?
1) Credit theory of money
2) Commodity theory of money
3) State theory of money and further considerations
C. Money creation
D. Hierarchy of credit
E. Digital Money
F. Central Bank Digital Currencies
IV. Literature Review
A. CBDC interest structure
B. Commercial banking in a retail CBDC world
1) Disintermediation of commercial banks
2) CBDC runs
C. Desired impact
1) General observations
2) Swedish e-Krona
3) Uruguayan e-Peso
4) ECB’s digital euro
V. Discussion
A. Benefit to society
B. Financial Stability
1) Commercial Banking
2) Financialization of the economy
2) Other Private Sector Solutions
VI. Final Remarks
A. Limitations of this paper
B. Conclusion
VII. References
-
Upload your own papers! Earn money and win an iPhone X. -
Upload your own papers! Earn money and win an iPhone X. -
Upload your own papers! Earn money and win an iPhone X. -
Upload your own papers! Earn money and win an iPhone X. -
Upload your own papers! Earn money and win an iPhone X. -
Upload your own papers! Earn money and win an iPhone X. -
Upload your own papers! Earn money and win an iPhone X. -
Upload your own papers! Earn money and win an iPhone X. -
Upload your own papers! Earn money and win an iPhone X. -
Upload your own papers! Earn money and win an iPhone X. -
Upload your own papers! Earn money and win an iPhone X. -
Upload your own papers! Earn money and win an iPhone X.