Banking in the digital age/ 1
Central Bank Digital Currencies. Implementation & impacts Fundaciรณn Rafael del Pino, 2018 Jorge Sicillia BBVA
Central Bank Digital Currency
Central Bank Digital Currency based on DLTs
Three features of cash:
Four CBDC schemes ...
1
To Improve interbank settlement Digital Clients
2
19.1 overall Mill To improve the payment system Mar-17
Zero Yield
3
% To developPenetration a new monetary policy tool to overcome zerobound interest rates
4
To increase surveillance and/or reduce systemic financial risk 2
Central Bank Digital Currency
Four Central Bank Digital Currency schemes
Universal Access
1
CBDC to improve interbank settlement
2
CBDC to improve overall payment system
3
CBDC as new policy tool
4
CBDC as CB deposit
Anonymity
Zero Yield
3
Central Bank Digital Currency
Expected outcomes of four CBDC schemes
Interbank settlement
Payment system
New policy tool
CB Deposit
1
2
3
4
Improved efficiency Lowering management costs Increasing competition
Improved efficiency
Getting rid of the zero lower bound
Financial stability and lower informality
Risk on CB Infrastructure
Cash is either banned or abandoned
Control against illegal markets
Risk to increase informality Impact on international flows
Financial repression Legitimacy issues
Credit might be extremely reduced Questionable role for CB if they redirect funds to the financial system 4
Conclusions We consider it likely that a CBDC will be adopted by at least some CBs over the next few years. The less disruptive scenarios (especially the first) are more likely, because of their ease of implementation and less uncertainty about their impact Additional research and debate is needed in order to understand CBDC and make it a good policy option for example in the EM environment. 5
ANNEXES
6
Central Bank Digital Currency
For further information...
https://www.bbvaresearch.com/wp-content/ uploads/2017/09/WP_CBDC_mod.pdf
https://www.bbvaresearch.com/wp-content/ uploads/2018/04/CBDCs-in-LATAM.pdf 7