Influencing the Velocity of Central Bank Digital Currencies
28 Pages Posted: 5 Feb 2020 Last revised: 8 Jul 2020
Date Written: January 6, 2020
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: Suggested Citation