Central Bank Digital Currency and the Future of Monetary Policy

32 Pages Posted: 21 Aug 2017

See all articles by Michael D. Bordo

Michael D. Bordo

Rutgers University, New Brunswick - Department of Economics; National Bureau of Economic Research (NBER)

Andrew T. Levin

Dartmouth College - Department of Economics

Date Written: August 2017

Abstract

We consider how a central bank digital currency (CBDC) could transform all aspects of the monetary system and facilitate the systematic and transparent conduct of monetary policy. In particular, we find that CBDC can serve as a practically costless medium of exchange, secure store of value, and stable unit of account. To achieve these criteria, CBDC would be account-based and interest-bearing, and the monetary policy framework would foster true price stability.

Suggested Citation

Bordo, Michael D. and Levin, Andrew T., Central Bank Digital Currency and the Future of Monetary Policy (August 2017). NBER Working Paper No. w23711. Available at SSRN: https://ssrn.com/abstract=3023109

Michael D. Bordo (Contact Author)

Rutgers University, New Brunswick - Department of Economics ( email )

New Brunswick, NJ
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Andrew T. Levin

Dartmouth College - Department of Economics ( email )

Hanover, NH 03755
United States

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