Search Results
Journal Article
Digital Currency, Digital Payments, and the 'Last Mile' to the Unbanked
Digital forms of payment are either not accessible or highly costly for unbanked consumers. This is because these forms of payment must be "funded" by some source of money, such as cash or a bank account. That creates the "last-mile" problem for the unbanked. This article examines various solutions for the funding problem that have been proposed in the literature, by regulators, and in bills submitted to Congress.
Journal Article
Should the United States Issue a Central Bank Digital Currency? Lessons from Abroad
If the web 3.0 requires a public ledger–based payments platform, central bank digital currency (CBDC) is unlikely to provide the digital currency needed to fuel the smart contracts of tomorrow. This payments dilemma can be solved by a hybrid digital currency that includes a new type of bank deposit as well as regulated private stablecoins, both of which clear and settle on a next-generation public ledger created and managed as a joint venture between banks and private stablecoin issuers. With this payments platform under Federal Reserve oversight, there would be no need for the Federal ...
Journal Article
Technological Change and Central Banking
The decentralized autonomous organization (DAO) represents a radically new way to manage databases. Since money and payments are all about managing databases and since banks play a central role in money and payments, DAO-based money and payments systems are potentially a disruptive force in the banking system—which includes central banks. One would normally expect regulatory frameworks to evolve with a changing technological landscape. However, the decentralized governance structure characteristic of DAOs renders it near impossible to regulate these entities directly—a property that makes ...
Discussion Paper
Central Banks and Digital Currencies
Recent developments in payments technology raise important questions about the role of central banks either in providing a digital currency themselves or in supporting the development of digital currencies by private actors, as some authors of this post have discussed in a recent IMF blog post. In this post, we consider two ways a central bank could choose to become involved with digital currencies and discuss some implications of these potential choices.
Speech
Remarks at the Panel Discussion, “Central Bank Perspectives on Central Bank Digital Currencies”
The topic of central bank digital currencies is certainly of interest to the Federal Reserve and other nations’ central banks around the world. Like others, the Federal Reserve System is considering both the technical and policy issues surrounding all aspects of a central bank digital currency. In my brief remarks today on the panel, I will touch on several of these key considerations.
Discussion Paper
Unstable Coins: The Early History of Central Bank Analog Currencies
Recently, there has been much discussion as to whether central bank digital currencies (CBDCs) should be introduced, and if so, how they should be designed. This article offers a historical perspective on this discussion, with a survey of early public bank (proto-central bank) "analog currencies"—circulating banknotes. Public banknotes were an experimental product when they were first issued in sixteenth-century Naples, but by the late nineteenth century, such notes could be found in most European countries. In between came all sorts of implementation difficulties: egregious insider fraud, ...
Briefing
Intermediation and Bank Liquidity: A Conference Recap
How might a central bank digital currency alter banking system operations? What is the effect of credit easing on the dynamics of bank runs? Does increased competition among banks mean a more fragile banking system, and what can be done about it? These were among the research questions addressed by economists during a recent Richmond Fed research conference.