Informal economy and central bank digital currency

【Author】 Oh, Eun Young; Zhang, Shuonan

【Source】ECONOMIC INQUIRY

【影响因子】1.710

【Abstract】This paper explores the association between the informal economy and the adoption of central bank digital currency (CBDC) by end users, namely households and businesses. Our findings suggest that CBDC may not be widely accepted by end users in the presence of a sizable informal economy in which cash is the primary method of payment. CBDC can decrease informality, but this effect becomes weaker in countries with larger informal economies. Tax reduction and CBDC interest rates can be useful tools to promote the adoption and effectiveness of CBDC, leading to a reallocation effect between formal and informal sectors.

【Keywords】central bank digital currency; DSGE; informal economy

【发表时间】

【收录时间】2022-06-29

【文献类型】理论性文章

【主题类别】

区块链治理-市场治理-数字货币