Cash use in most countries is falling slowly. On the margin, younger adults favor cash substitutes over cash. For older adults it is the reverse. Revealed preference tied to a changing population age structure seems to be the main influence on the demand for cash and why it is falling. Cash use...

A central bank digital currency, or CBDC, may provide an attractive alternative to traditional demand deposits held in private banks. When offering CBDC accounts, the central bank needs to confront classic issues of banking: conducting maturity transformation while providing liquidity to private...

We examine the economic consequences of an interest-bearing design of the Central-Bank Digital Currency (CBDC), and extend the discussion to an open-economy context with trade and capital flows. We use a dynamic stochastic general equilibrium (DSGE) model to simulate a baseline scenario with...

Cryptocurrency arose, and grew in popularity, following the financial crisis of 2008 built upon a promise of decentralizing money and payments. An examination of the history of money and banking the United States demonstrates that stable money benefits from strict controls and commitments by a...

As a new type of money, central bank digital currencies (CBDC) have gained strong interest among central banks as well as researchers. Driven from the Covid-19 pandemic, recent trends of online communication and collaboration, online banking and shopping are expected to increase attention on...

Due to technological change and the rise of private digital currencies more and more central banks investigate the possibility of issuing their own Central Bank Digital Currency (CBDC). This paper develops a conceptual framework, which shows how the issuance of CBDC and the provision of access...

Can introducing Central Bank Digital Currency (CBDC) improve social welfare? We construct a dual currency model to study whether introducing CBDC with a record- keeping technology can reduce tax evasion incentives, and further achieve a better al- location than in a cash-only economy. In our...

Central bank digital currencies (CBDCs) promise to provide cash-like safety and convenience for peer-to-peer payments. To do so, they must be resilient and accessible. They should also safeguard the user's privacy, while allowing for effective law enforcement. Different technical designs satisfy...

Digitalization and Blockchain have fundamentally transformed the structure of the monetary system. The first wave of cryptocurrencies such as Bitcoin, Ethereum or Ripple have failed to gain relevance in terms of their share in monetary transactions. This was due to systemic deficiencies leading...

The introduction of a central bank digital currency (CBDC) allows the central bank to engage in large-scale intermediation by competing with private financial intermediaries for deposits. Yet, since a central bank is not an investment expert, it cannot invest in long-term projects itself, but...