Central bank digital money

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Digital central bank money (ger .: Central Bank Digital Currency , CBDC ) is electronic money from commercial banks, companies and households, which directly accounts in the Central Bank is. These accounts can also be organized in the form of a blockchain managed by the central bank . Digital central bank money is subject to the central bank's monetary policy and, depending on how it is structured, could also be legal tender . One differentiates between CBDC, which is output from the corresponding central bank only to commercial banks and non-bank financial institutions (NBFI such as insurance) ( Wholesale CBDC directly accessible,) and a system in which CBDC private households (end user) is ( Retail CBDC ). The advantage of the Retail CBDC for companies and private households is that they would no longer be exposed to the counterparty risk at commercial banks . Cross-border payments could also become cheaper and faster if commercial banks were bypassed.

This money would circulate in a similar way to cash . The central banks alone would be authorized to generate digital central bank money in the respective currency. It would come into circulation by customers converting the book money generated by conventional money creation by commercial banks into digital central bank money . To do this, the commercial banks would first have to swap part of their reserves into digital central bank money so that it can then be transferred to customers. As a result, digital central bank money - also similar to cash - could be used or stored independently of commercial banks in payment transactions.

There is currently no digital central bank money anywhere in the world. However, some central banks have been doing research on this for many years. A group of central banks, coordinated by the Bank for International Settlements, is currently examining the advantages and disadvantages of CBDC. The discussion is fueled by planned private stablecoins such as Facebook's Libra or the announcement by the Chinese People's Bank that it will soon be launching digital central bank money. Various names are used to denote the individual currencies, such as E- krona , E- Euro , digital Euro , e- Peso or digital Yuan .

Opinions

The German Savings Banks and Giro Association are naturally critical of the introduction of digital central bank money. The commercial banks would be deprived of part of their business model if CBDC replaced a significant part of the giro money circulating in payment transactions . As a rule, banks do not currently pay interest on such sight deposits . If they had to procure digital central bank money for their customers instead, they would have to pay the full key interest rate.

Central banks are primarily investigating the question of whether CBDC contributes to more or less stability in the financial system in the event of a crisis. Because of the security of the new form of money guaranteed by the central bank, large amounts of bank deposits could be shifted to CBDC in uncertain times. The Bank of England emphasizes that the specific design can effectively limit this risk.

Initiatives to introduce sovereign money see part of their demands with digital central bank money . Some equate CBDC with sovereign money and advocate the increasing influence of central banks on the monetary system and the security of this money for users.

Individual evidence

  1. ↑ Wirtschaftssdienst.eu , Digital Central Bank Money as a New Monetary Policy Instrument
  2. ^ A b Marc Badertscher: New digital money. In: Handelszeitung , February 6, 2020, p. 8
  3. ↑ riksbank.se , E-krona project reports
  4. ↑ bundesbank.de , study: central banks reluctant to use digital central bank money
  5. ↑ bis.org , Banko Central del Uruguay, Uruguayan e-Peso on the context of financial inclusion, 2018
  6. ↑ Jürgen Stark : The future of money. In: NZZ , February 8, 2020, p. 12
  7. ↑ derstandard.at , calls for digital currency are getting louder
  8. ↑ German Savings Banks and Giro Association , Digital Central Bank Money: Critically reflect on the effects of society as a whole!
  9. ^ Bank of England , Central bank digital currencies - design principles and balance sheet implications
  10. ↑ monetative.de , (CBDC) = Safe Money for All Citizens
  11. ↑ vollgeld.page , digital central bank money, maintaining or overcoming the deposit money regime ? Design principles that make the difference