Central banks worldwide are currently exploring so called Central Bank Digital Currencies (CBDC). The Avant smart card system created by the Bank of Finland in the 1990's can be considered the world's first CBDC and the only one so far that has gone into production. Avant cards were based on...

The bulk of cash is held for store of value purposes, with such holdings sharply increasing in times of high economic uncertainty and only a fraction of the population choosing to hoard cash. We develop a Diamond and Dybvig model with public money as a store of value and heterogeneous beliefs...