I’ve updated my discussion on what is and isn’t a retail central bank digital currency (CBDC). My current definition is that it is a broadly available general purpose digital payment instrument, denominated in the jurisdiction’s unit of account, that is a direct liability of the jurisdiction’s monetary authority, subject to the same rules and regulations as imposed on the jurisdiction’s other units of account, that can be used for peer-to-peer transactions.
Notice that I never mentioned the technology platform – whether it runs on a centralized or decentralized ledger, or whether there is even a ledger at all (i.e., “token” based). And that’s because discussions around retail CBDC are generally agnostic about the platform type. However, it’s my sense that that is not the case for wholesale CBDC, and that may be because it is not really anything new. For example, a 2018 IMF staff discussion note characterized central bank reserves as a “wholesale form of CBDC used exclusively for interbank payments”.
Which implies to me that when people say “wholesale CBDC” they really mean to say “distributed ledger technology (DLT) based wholesale CBDC”. Later this week I’ll elaborate on this, and post a first draft of a summary of all DLT-based wholesale CBDC projects.
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