Digital Money and Central Banks Balance Sheet

The work provides a method for classifying blockchains and crypto-assets, facilitating their comparison for business and regulatory purposes. Blockchains - and more generally systems based on Distributed Ledger Technology (DLT) - adopt different technologic configurations, each distinguished by the activities performed, technical characteristics, and governance structures. Particular noteworthy is the difference between some DLTs, which integrate automated organizational procedures with traditional decision-making processes, and others that adopt entirely algorithmic governance. Equally complex is the task of identifying types of crypto-assets, also known as digital tokens, generated and transferred through this technology. The work outlines the primary characteristics of DLTs and crypto-assets, utilizing ‘switching circuits’ to visually represent or express them in a simple formula. The proposed methodology, applicable both in the EU and in the US, untangles a given DLT/crypto ecosystem and reassembles it through logic maps, facilitating the identification of the technologic, economic, and legal features and overcoming the risk of a rigid and easily outdated taxonomy. The ultimate purpose of the paper is to propose a working method capable of accommodating every possible configuration of DLT and digital token and their potential evolutions. Practical examples of regulatory application and two case studies (Ethereum and Polkadot) are provided

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Digital Money and Central Banks Balance Sheet

Abstract: for discussions. Remaining errors are our own. Views reflected are neither those of the IMF nor of the Central Bank of Peru (BCRP).

Cited by 4 publications

References 4 publications

Currency substitution in a world of looming retail CBDCs: Suggestive currency substitution-based evidence

Currency substitution in a world of looming retail CBDCs: Suggestive currency substitution-based evidence

C: Financial Operations and Services

A method for classifying blockchains and crypto-assets using 'switching circuits’

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