Bejoy Das Gupta, eCurrency Chief Economist, co-authors a paper for the 2020 Central Bank of the Future conference. The paper has been selected for posting as a part of the conference proceedings. The conference was an event co-hosted by the Federal Reserve Bank of San Francisco and the University of Michigan, Center on Finance, Law and Policy.
This paper focuses on the motivations, policy questions, and design issues for a retail central bank digital currency (CBDC) in a rapidly-digitalizing world. The attraction of CBDCs for developing countries stems from efficiency gains, expanded markets and financial inclusion. Ensuring that the general public has access to a well-regulated and state-guaranteed digital means of payment, which enhances financial stability, is also an important benefit. Meanwhile, advanced economies have a need for continued public access to central bank money, given economies of scale and network externalities.