Macro-financial implications of central bank digital currencies

【Author】 Rehman, Mubeen Abdur; Irfan, Muhammad; Naeem, Muhammad Abubakr; Lucey, Brian M.; Karim, Sitara

【Source】RESEARCH IN INTERNATIONAL BUSINESS AND FINANCE

【影响因子】6.143

【Abstract】The considerable deployment of central bank digital currencies (CBDCs) is imminent, as its in-terest has attracted the whole world. However, CBDCs faces several political, technological, and legal challenges. We add a few more challenges that have not received much attention and summarize them in the extant literature. We then emphasize a broad version of money to examine its likely impact on financial stability. Moreover, using time series data of three leading econo-mies and replying to past episodes' evidence of financial innovation, the historical behaviour to incorporate the impact of CBDCs, and the velocity of circulation, we scrutinize the hypothetical influence of CBDCs on financial stability and inflation. This study employs McCallum's policy rule based on money growth, which deals with monetary policy. Our simulations indicate that the CBDCs do not produce higher inflation while setting financial stability at risk. This study also suggests the necessary policy implications.

【Keywords】CBDC; Velocity; Broad money; Income; Interest rate

【发表时间】2023 JAN

【收录时间】2023-03-13

【文献类型】实验仿真

【主题类别】

区块链治理-市场治理-数字货币