Central Bank Digital Currencies: A Review of Operating Models and Design Issues

18 Pages Posted: 8 Feb 2023

See all articles by Bert Van Roosebeke

Bert Van Roosebeke

Bank for International Settlements (BIS) - International Association of Deposit Insurers

Ryan Defina

Bank for International Settlements (BIS) - International Association of Deposit Insurers

Date Written: December 15, 2022

Abstract

The topic of Central Bank Digital Currencies (CBDC) is highly relevant to deposit insurers. As an increasing number of central banks further their research and planning efforts in CBDC, IADI members are encouraged to intensify their understanding of the potential impact of the introduction of a CBDC in their own as well as in other jurisdictions.

To assess the potential impact of a CBDC, a sound understanding of operating models and design features is crucial. These will affect factors of key interest to deposit insurers, such as the degree of replacement of bank deposits by CBDC. Also, the implications of choices regarding operating models and design features extend to the division of labour between central and commercial banks and the degree of privacy attached to CBDC usage.

The paper offers a review of key issues relevant to deposit insurers regarding operating models and design features for CBDC, and links these to early global policy standards. Whilst not recommending a particular CBDC design, deposit insurers are encouraged to develop a deeper understanding of the principles presented and how the different policy options may affect the provision of deposit insurance.

This paper acts as a follow up to a previous IADI Fintech Brief which highlighted some key motivations for CBDCs by central banks. An upcoming paper will deal with the potential implications of CBDC for deposit insurers.

Keywords: deposit insurance, bank resolution

JEL Classification: G21, G33

Suggested Citation

Van Roosebeke, Bert and Defina, Ryan, Central Bank Digital Currencies: A Review of Operating Models and Design Issues (December 15, 2022). Available at SSRN: https://ssrn.com/abstract=4349746 or http://dx.doi.org/10.2139/ssrn.4349746

Bert Van Roosebeke

Bank for International Settlements (BIS) - International Association of Deposit Insurers

Centralbahnplatz 2
Basel, 4051
Switzerland

Ryan Defina (Contact Author)

Bank for International Settlements (BIS) - International Association of Deposit Insurers ( email )

Centralbahnplatz 2
Basel, 4051
Switzerland

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