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Systemic stablecoin and the defensive case for Central Bank Digital Currency: A critique of the Bank of England’s framing

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  • Morgan, Jamie

Abstract

The case for CBDC does not just rest on its benefits or attractions, but also on its scope to avert potential problems associated with stablecoin. In this brief paper I critique the ‘illustrative scenario’ at the heart of the Bank of England’s recent New Forms of Digital Money discussion paper. I suggest that it does not deal realistically with the motives and practices of issuers. The argument speaks to contradictory trends both in the urgency of regulation of stablecoin and the underlying case for CBDC.

Suggested Citation

  • Morgan, Jamie, 2022. "Systemic stablecoin and the defensive case for Central Bank Digital Currency: A critique of the Bank of England’s framing," Research in International Business and Finance, Elsevier, vol. 62(C).
    • Handle: RePEc:eee:riibaf:v:62:y:2022:i:c:s0275531922001040
    DOI: 10.1016/j.ribaf.2022.101716
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    References listed on IDEAS

    as
    1. Kumhof, Michael & Noone, Clare, 2018. "Central bank digital currencies - design principles and balance sheet implications," Bank of England working papers 725, Bank of England.
    2. Ingham, Geoffrey, 2004. "The nature of money," economic sociology. perspectives and conversations, Max Planck Institute for the Study of Societies, vol. 5(2), pages 18-28.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Ayadi, Ahmed & Ghabri, Yosra & Guesmi, Khaled, 2023. "Directional predictability from central bank digital currency to cryptocurrencies and stablecoins," Research in International Business and Finance, Elsevier, vol. 65(C).
    2. Wang, Yizhi & Wei, Yu & Lucey, Brian M. & Su, Yang, 2023. "Return spillover analysis across central bank digital currency attention and cryptocurrency markets," Research in International Business and Finance, Elsevier, vol. 64(C).
    3. Wang, Yi-Ran & Ma, Chao-Qun & Ren, Yi-Shuai, 2022. "A model for CBDC audits based on blockchain technology: Learning from the DCEP," Research in International Business and Finance, Elsevier, vol. 63(C).
    4. Jabbar, Abdul & Geebren, Ahmed & Hussain, Zahid & Dani, Samir & Ul-Durar, Shajara, 2023. "Investigating individual privacy within CBDC: A privacy calculus perspective," Research in International Business and Finance, Elsevier, vol. 64(C).
    5. Zhang, Runze & Li, Zhijun & Xiao, Chunqu & You, Jiwang, 2023. "New engines of economic growth: How digital currencies lead the way to growth in the era of digital economy," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 1597-1617.
    6. Bibi, Samuele, 2023. "Money in the time of crypto," Research in International Business and Finance, Elsevier, vol. 65(C).
    7. Elsayed, Ahmed H. & Nasir, Muhammad Ali, 2022. "Central bank digital currencies: An agenda for future research," Research in International Business and Finance, Elsevier, vol. 62(C).
    8. Bibi, Samuele & Canelli, Rosa, 2023. "The interpretation of CBDC within an endogenous money framework," Research in International Business and Finance, Elsevier, vol. 65(C).
    9. Dunbar, Kwamie & Treku, Daniel N., 2024. "Examining the impact of a central bank digital currency on the access to banking," International Review of Financial Analysis, Elsevier, vol. 93(C).
    10. Gupta, Somya & Pandey, Dharen Kumar & El Ammari, Anis & Sahu, Ganesh P., 2023. "Do perceived risks and benefits impact trust and willingness to adopt CBDCs?," Research in International Business and Finance, Elsevier, vol. 66(C).

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    More about this item

    Keywords

    Central Bank Digital Currency; Cryptocurrency; Stablecoin; Diem;
    All these keywords.

    JEL classification:

    • A1 - General Economics and Teaching - - General Economics
    • B0 - Schools of Economic Thought and Methodology - - General
    • G00 - Financial Economics - - General - - - General
    • G1 - Financial Economics - - General Financial Markets
    • G2 - Financial Economics - - Financial Institutions and Services

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