On Digital Currencies

24 Pages Posted: 14 Feb 2024

See all articles by Harald Uhlig

Harald Uhlig

University of Chicago - Department of Economics; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: February 10, 2024


I discuss private and central-bank-issued digital currencies, summarizing my prior research. I argue that prices of private digital currencies such as bitcoin follow random walks or, more generally, risk adjusted martingales. For central bank digital currencies, I argue that they enhance the “CBDC trilemma” facing a central bank: out of the three objectives, price stability, efficiency, and monetary trust, it can achieve at most two.

Keywords: bitcoin, cryptocurrencies, pricing, central bank digital currency, CBDC, bank runs, monetary stability

JEL Classification: E31, E42, E44, E51, E52, G12, G21

Suggested Citation

Uhlig, Harald, On Digital Currencies (February 10, 2024). University of Chicago, Becker Friedman Institute for Economics Working Paper No. 2024-17, Available at SSRN: https://ssrn.com/abstract=4724976 or http://dx.doi.org/10.2139/ssrn.4724976

Harald Uhlig (Contact Author)

University of Chicago - Department of Economics ( email )

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Chicago, IL 60637
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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