Influencing the Velocity of Central Bank Digital Currencies

28 Pages Posted: 5 Feb 2020 Last revised: 8 Jul 2020

See all articles by Ezechiel Copic

Ezechiel Copic

C Labs Inc.

Markus Franke

affiliation not provided to SSRN

Date Written: January 6, 2020

Abstract

The advent of stablecoins offers new and innovative ways to improve financial inclusion, reduce transaction costs, and increase the efficiency of the global financial system. The following paper explores the assets and process necessary for creating a central bank digital currency (CBDC) on the Celo platform, as well as the potential impact on the financial system. Perhaps most importantly, the paper also introduces the idea that current technological advancements allow for a better understanding of the velocity of money, and may afford central banks the ability to influence money velocity, thus potentially creating a new transmission channel for monetary policy.

Keywords: CBDC, central bank digital currency, monetary policy, stablecoin, Celo, financial inclusion, fintech, velocity

JEL Classification: E26, E41, E42, E51, E52, E58

Suggested Citation

Copic, Ezechiel and Franke, Markus, Influencing the Velocity of Central Bank Digital Currencies (January 6, 2020). Available at SSRN: https://ssrn.com/abstract=3518736 or http://dx.doi.org/10.2139/ssrn.3518736

Ezechiel Copic (Contact Author)

C Labs Inc. ( email )

Berlin
Germany

Markus Franke

affiliation not provided to SSRN

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