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Central Bank Digital Currencies

In: Handbook on Blockchain

Author

Listed:
  • Nadia Pocher

    (Universitat Autónoma de Barcelona
    KU Leuven - CiTiP
    Universitá di Bologna)

  • Andreas Veneris

    (University of Toronto)

Abstract

Today’s societal digitization continues to advance at exponential speeds driven by technology trends. Billions of Internet of Things devices have made their way into our daily lives but also into healthcare, manufacturing, and supply chains. In contrast, the financial sector still largely operates on legacy infrastructures, where merchants receive their payments long after they released the digital/physical good to the consumer. In addition, the emergence of Decentralized Finance through blockchain technology, and the accumulation of data in private silos, has demonstrated a capacity to impact national sovereignty and monetary transmission channels. Against this backdrop, many central banks have recently started to research and test the issuance of digitally native fiat money—or Central Bank Digital Currencies (CBDCs)—in an effort to redesign the essence and use of physical cash. CBDCs present a broad variety of designs, which translate into manifold techno-legal and standardization policy questions. In this context, this chapter surveys the state-of-the art with specific focus on “retail” CBDCs. In doing so, it provides an overview of candidate architectures, heeds legal impacts and regulatory compliance issues, presents a set of case studies and touches upon cross-border CBDC challenges.

Suggested Citation

  • Nadia Pocher & Andreas Veneris, 2022. "Central Bank Digital Currencies," Springer Optimization and Its Applications, in: Duc A. Tran & My T. Thai & Bhaskar Krishnamachari (ed.), Handbook on Blockchain, pages 463-501, Springer.
    • Handle: RePEc:spr:spochp:978-3-031-07535-3_15
    DOI: 10.1007/978-3-031-07535-3_15
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    References listed on IDEAS

    as
    1. David Chaum & Christian Grothoff & Thomas Moser, 2021. "How to issue a central bank digital currency," Working Papers 2021-03, Swiss National Bank.
    2. Ojo, Marianne, 2021. "Balancing public-private partnerships in a digital age: CBDCs, central banks and technology firms," MPRA Paper 107716, University Library of Munich, Germany.
    3. Raphael Auer & Rainer Boehme, 2021. "Central bank digital currency: the quest for minimally invasive technology," BIS Working Papers 948, Bank for International Settlements.
    4. Raphael Auer & Codruta Boar & Giulio Cornelli & Jon Frost & Henry Holden & Andreas Wehrli, 2021. "CBDCs beyond borders: results from a survey of central banks," BIS Papers, Bank for International Settlements, number 116.
    5. Brunnermeier, Markus K. & Niepelt, Dirk, 2019. "On the equivalence of private and public money," Journal of Monetary Economics, Elsevier, vol. 106(C), pages 27-41.
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    9. Mr. Tanai Khiaonarong & David Humphrey, 2019. "Cash Use Across Countries and the Demand for Central Bank Digital Currency," IMF Working Papers 2019/046, International Monetary Fund.
    10. Sands, Peter & Weisman, Benjamin & Campbell, Haylea & Keatinge, Tom, 2017. "Limiting the Use of Cash for Big Purchases: Assessing the Case for Uniform Cash Thresholds," International Cash Conference 2017 – War on Cash: Is there a Future for Cash? 162906, Deutsche Bundesbank.
    11. Sean Foley & Jonathan R Karlsen & Tālis J Putniņš, 2019. "Sex, Drugs, and Bitcoin: How Much Illegal Activity Is Financed through Cryptocurrencies?," The Review of Financial Studies, Society for Financial Studies, vol. 32(5), pages 1798-1853.
    12. Codruta Boar & Henry Holden & Amber Wadsworth, 2020. "Impending arrival - a sequel to the survey on central bank digital currency," BIS Papers, Bank for International Settlements, number 107.
    13. Khiaonarong, Tanai & Humphrey, David, 2019. "Cash use across countries and the demand for central bank digital currency," Journal of Payments Strategy & Systems, Henry Stewart Publications, vol. 13(1), pages 32-46, March.
    14. Geoffrey Goodell & Hazem Danny Al-Nakib & Paolo Tasca, 2021. "A Digital Currency Architecture for Privacy and Owner-Custodianship," Future Internet, MDPI, vol. 13(5), pages 1-28, May.
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    2. Ozili, Peterson K, 2024. "Artificial intelligence and central bank digital currency," MPRA Paper 121567, University Library of Munich, Germany.

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