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Central Bank Digital Currency: Scenarios of Implementation and Potential Consequences for Monetary System

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  • Patryk Kaczmarek

    (Institute of Banking and Finance, Faculty of Management, University of Gdansk, Poland)

Abstract

Computerization of social life enabled market participants to search for new forms of electronic payments. The share of cash in total payments is systematically decreasing, which poses the risk of being supplanted by other instruments, including cryptocurrencies. Central banks, therefore, faced the challenge of adjusting their issuing activities to the current social and market conditions, which resulted in the emergence of the concept and discussion of the introduction of digital cash. The purpose of this paper is to examine the abovementioned issues and indication of potential scenarios for the introduction of central bank digital currency with an indication of potential consequences for the banking sector. The thesis of this paper is the following statement: The emergence of digital money of the central bank may significantly change the nature of commercial banks' activities - including potentially eliminating their role in issuing cashless money.

Suggested Citation

  • Patryk Kaczmarek, 2022. "Central Bank Digital Currency: Scenarios of Implementation and Potential Consequences for Monetary System," Journal of Central Banking Theory and Practice, Central bank of Montenegro, vol. 11(3), pages 137-154.
    • Handle: RePEc:cbk:journl:v:11:y:2022:i:3:p:137-154
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    File URL: http://www.cbcg.me/repec/cbk/journl/vol11no3-7.pdf
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    Citations

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    Cited by:

    1. Cristina Sbîrneciu & Nicoleta-Valentina Florea, 2023. "An exploratory case study: Romania’s digital innovation opportunities due to rise of digital currencies," Journal of Financial Studies, Institute of Financial Studies, vol. 14(8), pages 143-164, May.
    2. repec:fst:rfsisf:v:8:y:2023:i:14:p:143-164 is not listed on IDEAS

    More about this item

    Keywords

    Central banking; commodity money; cash; central bank digital currency; deposits; checks; cryptocurrencies.;
    All these keywords.

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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