Central Bank Digital Currency and Monetary Policy

Many central banks are contemplating whether to issue central bank digital currency (CBDC). If they do, CBDC will co-exist with other means of payment, including cash. On one hand, CBDC has certain potential benefits, including the possibility that it can bear interest. On the other hand, cash may be preferred by agents over CBDC, perhaps because they can remain anonymous in transactions by using cash.

Read the Bank of Canada paper


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