IMF: Casting Light on Central Bank Digital Currencies

The paper is organized in five sections. The first offers an overview of CBDCs—what they are, why central banks might issue CBDCs, and how they might design these. Using a stylized model, the second section offers a conceptual discussion of the tradeoffs between different CBDC designs and examines some of the implications for financial intermediation. The third section looks beyond the model at potential side effects of introducing a CBDC on bank funding and business models, run risk, monetary policy transmission, and cross-border payments. The fourth section offers an overview of central bank investigations and intentions relative to the introduction of a CBDC. The last section concludes and summarizes the main messages from the paper.

The paper is available at

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