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Preconditions for a General-Purpose Central Bank Digital Currency

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Over the last few years, interest in the potential issuance of a general-purpose central bank digital currency (CBDC) has increased. Introducing and operating a CBDC would require actions by many stakeholders and not just the central bank. In view of the far-reaching implications of introducing a new form of money to the public, the decision cannot be taken lightly. This paper outlines foundational preconditions and proposes areas of work that may help achieve them prior to the possible implementation of a potential future general-purpose CBDC in the United States. These foundational preconditions include clear policy objectives, broad stakeholder support, a strong legal framework, robust technology, and readiness for market acceptance and adoption.

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  • Jess Cheng & Angela Lawson & Paul Wong, 2021. "Preconditions for a General-Purpose Central Bank Digital Currency," FEDS Notes 2021-02-24-1, Board of Governors of the Federal Reserve System (U.S.).
    • Handle: RePEc:fip:fedgfn:2021-02-24-1
    DOI: 10.17016/2380-7172.2839
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    File URL: https://www.federalreserve.gov//econres/notes/feds-notes/preconditions-for-a-general-purpose-central-bank-digital-currency-20210224.htm
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    1. Xin, Baogui & Jiang, Kai, 2023. "Central bank digital currency and the effectiveness of negative interest rate policy: A DSGE analysis," Research in International Business and Finance, Elsevier, vol. 64(C).

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