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Should the United States Issue a Central Bank Digital Currency? Lessons from Abroad

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  • Charles M. Kahn

Abstract

If the web 3.0 requires a public ledger–based payments platform, central bank digital currency (CBDC) is unlikely to provide the digital currency needed to fuel the smart contracts of tomorrow. This payments dilemma can be solved by a hybrid digital currency that includes a new type of bank deposit as well as regulated private stablecoins, both of which clear and settle on a next-generation public ledger created and managed as a joint venture between banks and private stablecoin issuers. With this payments platform under Federal Reserve oversight, there would be no need for the Federal Reserve to issue CBDC.

Suggested Citation

  • Charles M. Kahn, 2022. "Should the United States Issue a Central Bank Digital Currency? Lessons from Abroad," Policy Hub, Federal Reserve Bank of Atlanta, vol. 2022(8), June.
    • Handle: RePEc:fip:a00068:96685
    DOI: 10.29338/ph2022-08
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    References listed on IDEAS

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    4. Kenneth S. Rogoff, 2016. "The Curse of Cash," Economics Books, Princeton University Press, edition 1, number 10798.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    central bank digital currency; private stablecoins; web 3.0; smart contracts;
    All these keywords.

    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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