The promises and perils of central bank digital currencies
This paper analyzes the proposal that central banks should issue digital currencies (CBDC) to provide a public alternative to private digital accounts and cryptocurrencies. We build on some recent themes in political economy research to give a broader and more balanced perspective than the existing...
Saved in:
| Main Authors: | , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Association Recherche & Régulation
2020-12-01
|
| Series: | Revue de la Régulation |
| Subjects: | |
| Online Access: | https://journals.openedition.org/regulation/18018 |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| _version_ | 1832577969879515136 |
|---|---|
| author | Louis Larue Clément Fontan Joakim Sandberg |
| author_facet | Louis Larue Clément Fontan Joakim Sandberg |
| author_sort | Louis Larue |
| collection | DOAJ |
| description | This paper analyzes the proposal that central banks should issue digital currencies (CBDC) to provide a public alternative to private digital accounts and cryptocurrencies. We build on some recent themes in political economy research to give a broader and more balanced perspective than the existing literature, highlighting both the promises and perils of CBDC. We argue that, on the one hand, the present state of the private financial sector is problematic and regulators should seek to tackle the issues of financial power, financial instability and lack of adequate monetary policy options. On the other hand, implementing CBDC comes with risks of its own, such as that of creating a “Frankenstein scenario” where too much power is given to unelected technocrats. Our tentative conclusion is therefore that CBDC should be seen as a second-best option, while the primary focus of policy makers should be on the possibility of financial re-regulation. |
| format | Article |
| id | doaj-art-7edea27ccd6f40f0a6515101703093ca |
| institution | Kabale University |
| issn | 1957-7796 |
| language | English |
| publishDate | 2020-12-01 |
| publisher | Association Recherche & Régulation |
| record_format | Article |
| series | Revue de la Régulation |
| spelling | doaj-art-7edea27ccd6f40f0a6515101703093ca2025-01-30T14:26:03ZengAssociation Recherche & RégulationRevue de la Régulation1957-77962020-12-012810.4000/regulation.18018The promises and perils of central bank digital currenciesLouis LarueClément FontanJoakim SandbergThis paper analyzes the proposal that central banks should issue digital currencies (CBDC) to provide a public alternative to private digital accounts and cryptocurrencies. We build on some recent themes in political economy research to give a broader and more balanced perspective than the existing literature, highlighting both the promises and perils of CBDC. We argue that, on the one hand, the present state of the private financial sector is problematic and regulators should seek to tackle the issues of financial power, financial instability and lack of adequate monetary policy options. On the other hand, implementing CBDC comes with risks of its own, such as that of creating a “Frankenstein scenario” where too much power is given to unelected technocrats. Our tentative conclusion is therefore that CBDC should be seen as a second-best option, while the primary focus of policy makers should be on the possibility of financial re-regulation.https://journals.openedition.org/regulation/18018central bankscentral bank digital currencies (CBDC)financial ethicshelicopter money |
| spellingShingle | Louis Larue Clément Fontan Joakim Sandberg The promises and perils of central bank digital currencies Revue de la Régulation central banks central bank digital currencies (CBDC) financial ethics helicopter money |
| title | The promises and perils of central bank digital currencies |
| title_full | The promises and perils of central bank digital currencies |
| title_fullStr | The promises and perils of central bank digital currencies |
| title_full_unstemmed | The promises and perils of central bank digital currencies |
| title_short | The promises and perils of central bank digital currencies |
| title_sort | promises and perils of central bank digital currencies |
| topic | central banks central bank digital currencies (CBDC) financial ethics helicopter money |
| url | https://journals.openedition.org/regulation/18018 |
| work_keys_str_mv | AT louislarue thepromisesandperilsofcentralbankdigitalcurrencies AT clementfontan thepromisesandperilsofcentralbankdigitalcurrencies AT joakimsandberg thepromisesandperilsofcentralbankdigitalcurrencies AT louislarue promisesandperilsofcentralbankdigitalcurrencies AT clementfontan promisesandperilsofcentralbankdigitalcurrencies AT joakimsandberg promisesandperilsofcentralbankdigitalcurrencies |