-
How do we give the general public access to a non-cash financial instrument that is as safe and liquid as cash and which provides a similar degree of privacy, finality and instantaneity? That is the key question of CBDC… Either the central bank itself issues e-money, or it merely safeguards the funds that commercial e-money issuers collect from their customers. The latter option is much easier to implement while delivering practically the same outcome. In effect, the central bank would become not just a central bank but also a kind of central e-money institution.
-
“In principle, individuals should have the ability to interface directly with the central banks as they do with physical money and not be forced to use commercial banks. Even if consumers voluntarily choose to perform a majority of their financial interactions through commercial banks, the option to exit the relationship should be maintained. Otherwise, the government would be removing consumer choice and mandating patronage of a highly concentrated sector.”
-
This paper analyzes remittance operations with and without cryptocurrency and blockchain technologies in general and present pros and cons of Libra for cross-border payments and money transfers. We also present a brief discussion on challenges posed by global cryptocurrencies to central bank governing bodies all over the world and policy implications arising out of potential conflicts between sovereign currencies and future of global cryptocurrencies such as Libra.
-
This paper presents a model where persistent trade shocks and search frictions create demand for a basket-backed stablecoin, such as Mark Carney’s “synthetic hegemonic currency” or Facebook’s recent proposal for Libra.