Central Bank Digital Currencies and the New World of Money and Payment Systems

Three catalysts are causing a fundamental reorientation of domestic and international monetary and payment systems: Facebook’s Libra, China’s central bank digital currency (the Digital Currency / Electronic Payment (DCEP) system), and the COVID-19 pandemic. These catalysts stand in stark contrast to all previous disruptions and are the focus of our new paper.

First, and crucially, each catalyst is likely to have a systemic effect on domestic and international payment systems. Second, all three systemic catalysts are operating concurrently. Third, all three are mutually reinforcing – developments and regulatory changes affecting one will often directly affect the others.

While Bitcoin … Read more