Digital currencies, including potential central bank digital currencies (CBDC), have generated a lot of interest over the past decade, since the emergence of bitcoin, write researchers from across the Federal Reserve system. The interest has only grown in recent months because of a desire for contactless payment methods, stemming from the coronavirus pandemic. In this post, they discuss a common distinction made between “token-based” and “account-based” digital currencies. They show that this distinction is problematic because Bitcoin and many other digital currencies satisfy both definitions.
