[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/bca/bocadp/16-22.html
   My bibliography  Save this paper

Central Bank Digital Currencies: A Framework for Assessing Why and How

Author

Listed:
  • Ben Fung
  • Hanna Halaburda
Abstract
Digital currencies have attracted strong interest in recent years and have the potential to become widely adopted for use in making payments. Public authorities and central banks around the world are closely monitoring developments in digital currencies and studying their implications for the economy, the financial system and central banks. One key policy question for public authorities such as a central bank is whether or not to issue its own digital currency that can be used by the general public to make payments. There are several public policy arguments for a central-bank-issued digital currency. This paper proposes a framework for assessing why a central bank should consider issuing a digital currency and how to implement it to improve the efficiency of the retail payment system.

Suggested Citation

  • Ben Fung & Hanna Halaburda, 2016. "Central Bank Digital Currencies: A Framework for Assessing Why and How," Discussion Papers 16-22, Bank of Canada.
    • Handle: RePEc:bca:bocadp:16-22
    as

    Download full text from publisher

    File URL: https://www.bankofcanada.ca/wp-content/uploads/2016/11/sdp2016-22.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. repec:bla:intfin:v:3:y:2000:i:2:p:211-27 is not listed on IDEAS
    2. Ben Fung & Kim Huynh & Gerald Stuber, 2015. "The Use of Cash in Canada," Bank of Canada Review, Bank of Canada, vol. 2015(Spring), pages 45-56.
    3. Hanna Halaburda & Mikolaj Jan Piskorski, 2010. "When Should a Platform Give People Fewer Choices and Charge More for Them?," Antitrust Chronicle, Competition Policy International, vol. 7.
    4. Wilko Bolt & Maarten R.C. Van Oordt, 2020. "On the Value of Virtual Currencies," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 52(4), pages 835-862, June.
    5. Ben Fung & Scott Hendry & Warren E. Weber, 2017. "Canadian Bank Notes and Dominion Notes: Lessons for Digital Currencies," Staff Working Papers 17-5, Bank of Canada.
    6. Hanna Halaburda & Mikołaj Jan Piskorski & Pınar Yıldırım, 2018. "Competing by Restricting Choice: The Case of Matching Platforms," Management Science, INFORMS, vol. 64(8), pages 3574-3594, August.
    7. Hanna Halaburda & Mikolaj Jan Piskorski, 2010. "Competing by Restricting Choice: The Case of Search Platforms," Harvard Business School Working Papers 10-098, Harvard Business School, revised Jan 2013.
    8. Jean-Charles Rochet & Jean Tirole, 2003. "Platform Competition in Two-Sided Markets," Journal of the European Economic Association, MIT Press, vol. 1(4), pages 990-1029, June.
    9. Barrdear, John & Kumhof, Michael, 2016. "The macroeconomics of central bank issued digital currencies," Bank of England working papers 605, Bank of England.
    10. Selgin, George A, 1994. "On Ensuring the Acceptability of a New Fiat Money," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 26(4), pages 808-826, November.
    11. Ulf Von Kalckreuth & Tobias Schmidt & Helmut Stix, 2014. "Using Cash to Monitor Liquidity: Implications for Payments, Currency Demand, and Withdrawal Behavior," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 46(8), pages 1753-1786, December.
    12. Jonathan Chiu & Tsz-Nga Wong, 2015. "On the Essentiality of E-Money," Staff Working Papers 15-43, Bank of Canada.
    13. Jonathan Witmer & Jing Yang, 2016. "Estimating Canada’s Effective Lower Bound," Bank of Canada Review, Bank of Canada, vol. 2016(Spring), pages 3-14.
    14. Ben Fung & Miguel Molico & Gerald Stuber, 2014. "Electronic Money and Payments: Recent Developments and Issues," Discussion Papers 14-2, Bank of Canada.
    15. Sébastien LOTZ & Guillaume ROCHETEAU, 2000. "Launching of a New Currency in a Simple Random Matching Model," Cahiers de Recherches Economiques du Département d'économie 00.10, Université de Lausanne, Faculté des HEC, Département d’économie.
    16. Ali, Robleh & Barrdear, John & Clews, Roger & Southgate, James, 2014. "Innovations in payment technologies and the emergence of digital currencies," Bank of England Quarterly Bulletin, Bank of England, vol. 54(3), pages 262-275.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Walter Engert & Ben Fung, 2017. "Central Bank Digital Currency: Motivations and Implications," Discussion Papers 17-16, Bank of Canada.
    2. Paul Belleflamme & Martin Peitz, 2019. "Managing competition on a two‐sided platform," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 28(1), pages 5-22, January.
    3. Davoodalhosseini, Seyed Mohammadreza, 2022. "Central bank digital currency and monetary policy," Journal of Economic Dynamics and Control, Elsevier, vol. 142(C).
    4. Jonathan Chiu & Tsz-Nga Wong, 2014. "E-Money: Efficiency, Stability and Optimal Policy," Staff Working Papers 14-16, Bank of Canada.
    5. Luca Marchiori, 2018. "Monetary theory reversed: Virtual currency issuance and miners’ remuneration," BCL working papers 115, Central Bank of Luxembourg.
    6. Charles M. Kahn & Francisco Rivadeneyra & Tsz-Nga Wong, 2018. "Should the Central Bank Issue E-money?," Staff Working Papers 18-58, Bank of Canada.
    7. James Chapman & Carolyn A. Wilkins, 2019. "Crypto ‘Money’: Perspective of a Couple of Canadian Central Bankers," Discussion Papers 2019-1, Bank of Canada.
    8. Teh, Christopher & Wang, Chengsi & Watanabe, Makoto, 2024. "Strategic limitation of market accessibility: Search platform design and welfare," Journal of Economic Theory, Elsevier, vol. 216(C).
    9. Walter Engert & Ben Fung, 2020. "A Uniform Currency in a Cashless Economy," Staff Analytical Notes 2020-7, Bank of Canada.
    10. Kim Huynh & Gradon Nicholls & Oleksandr Shcherbakov, 2019. "Explaining the Interplay Between Merchant Acceptance and Consumer Adoption in Two-Sided Markets for Payment Methods," Staff Working Papers 19-32, Bank of Canada.
    11. Agur, Itai & Ari, Anil & Dell’Ariccia, Giovanni, 2022. "Designing central bank digital currencies," Journal of Monetary Economics, Elsevier, vol. 125(C), pages 62-79.
    12. Cong, Lin William & Li, Ye & Wang, Neng, 2022. "Token-based platform finance," Journal of Financial Economics, Elsevier, vol. 144(3), pages 972-991.
    13. Zura Kakushadze & Jim Kyung-Soo Liew, 2018. "CryptoRuble: From Russia with Love," Papers 1801.05760, arXiv.org.
    14. Xinyi Lyu & Tiaojun Xiao & Jingquan Li, 2024. "Evolution of direct network effects: A perspective of market thickness of an online freight platform," Electronic Markets, Springer;IIM University of St. Gallen, vol. 34(1), pages 1-16, December.
    15. Heiko Karle & Martin Peitz & Markus Reisinger, 2020. "Segmentation versus Agglomeration: Competition between Platforms with Competitive Sellers," Journal of Political Economy, University of Chicago Press, vol. 128(6), pages 2329-2374.
    16. Maximilian Julius Krome & Ulrich Pidun, 2023. "Conceptualization of research themes and directions in business ecosystem strategies: a systematic literature review," Management Review Quarterly, Springer, vol. 73(2), pages 873-920, June.
    17. Kevin J. Boudreau, 2012. "Let a Thousand Flowers Bloom? An Early Look at Large Numbers of Software App Developers and Patterns of Innovation," Organization Science, INFORMS, vol. 23(5), pages 1409-1427, October.
    18. Chen, Heng & Huynh, Kim P. & Shy, Oz, 2019. "Cash versus card: Payment discontinuities and the burden of holding coins," Journal of Banking & Finance, Elsevier, vol. 99(C), pages 192-201.
    19. Barrdear, John & Kumhof, Michael, 2022. "The macroeconomics of central bank digital currencies," Journal of Economic Dynamics and Control, Elsevier, vol. 142(C).
    20. Henry, Christopher S. & Huynh, Kim P. & Nicholls, Gradon, 2018. "Bitcoin awareness and usage in Canada," Journal of Digital Banking, Henry Stewart Publications, vol. 2(4), pages 311-337, May.

    More about this item

    Keywords

    Digital Currencies; Financial services; Payment clearing and settlement systems;
    All these keywords.

    JEL classification:

    • E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bca:bocadp:16-22. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/bocgvca.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.