Ensuring Adoption of Central Bank Digital Currencies – an Easy Task or a Gordian Knot?

Zamora-Pérez, Alejandro; Coschignano, Eliana; Barreiro, Lorena

doi:10.2139/ssrn.4245420

Cited by 3 publications

(1 citation statement)

References 69 publications

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“…Technological uncertainty: The decision to choose the best technology that is still developing is deemed a challenge. Zamora-Perez, et al [16], also, argued that central banks might, in some cases, be faced with difficult decisions in terms of balancing the following three aspects: (i) keeping the current order of priority for policy goals, (ii) opting for designs and strategies that could increase the likelihood of adoption, and (iii) using designs that avoid negative economic effects. Finally, an identification issue.…”

Section: Vmentioning

confidence: 99%

Digital Currencies and The Monetary System: Review and Issues

Ogun

2023

ASM

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This paper is a review article on digitalization, generating issues from the discourse. The place of digital currencies in the contemporary world of banking and commerce was discussed, and so were their attractiveness and variants in the emergent trend. The evolution and the conditions for the effectiveness of digitalization, differentiated policy goals of the various central bank digital currency projects as well as the regulatory and supervisory authorities were articulated and highlighted. Three competing models of central bank digital currency concerning the allocation of the functions of issuance, the validity of transactions, ledger update, user interface, user data and customer service were identified and distinguished by the different involvement of the central bank, commercial banks and the private sector in the functions identified. The choice of optimal technology underpinning the central bank digital currency was justified. The characteristics and functions of the various central bank digital currency designs were identified and discussed. Actual and potential challenges of the various central bank digital currencies gave insights into the present and possibly the future operating procedure of the central bank digital currencies. Perceived potential risks of central bank digital currency on commercial banks, financial stability and monetary policy as well as the likely combating measures would shape the future of the monetary system. However, the drivers of the reserve currency status would most likely remain unchanged. Central bank digital currency could offer the opportunity to address the challenges of cross-border payments.

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Section: Vmentioning

confidence: 99%

Digital Currencies and The Monetary System: Review and Issues

Ogun

2023

ASM

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Simulating the Adoption of a Retail CBDC

León,

Moreno,

Soramäki

2024

Jahrbücher Für Nationalökonomie Und Statistik

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We use agent-based modelling to build a digital twin of the retail payment system, where heterogeneous consumers and merchants interact, learn, and adapt as they meet and use different monies and payment instruments. As we introduce an rCBDC, the model simulates its adoption. We calibrate this digital twin to Spain’s retail payment ecosystem. We run hypothetical scenarios that correspond to public discussions about the digital euro. Results show that introducing an rCBDC without attractive design options and stimulus results in low and slow adoption. Results suggest that the reverse waterfall functionality, a positive remuneration spread, and the distribution of government subsidies via rCBDC are effective in fostering adoption; yet, the distribution of government subsidies via rCBDC is the only one that creates incentives to reduce the use of cash. Balance limits and top-up limits are effective in restraining adoption. Results also suggest that combining design options and stimulus with limits to holding rCBDCs could aid in achieving a sweet spot of adoption.

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Central Bank Digital Currency and Cash in the Euro Area: Current Developments and one Specific Proposal

Rösl¹,

Seitz²

2022

CCM

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Ensuring Adoption of Central Bank Digital Currencies – an Easy Task or a Gordian Knot?

Cited by 3 publications

References 69 publications

Digital Currencies and The Monetary System: Review and Issues

Digital Currencies and The Monetary System: Review and Issues

Simulating the Adoption of a Retail CBDC

Central Bank Digital Currency and Cash in the Euro Area: Current Developments and one Specific Proposal

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