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Central Bank Digital Currencies: A Review of Operating Models and Design Issues

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  • Van Roosebeke, Bert
  • Defina, Ryan

Abstract

The topic of Central Bank Digital Currencies (CBDC) is highly relevant to deposit insurers. As an increasing number of central banks further their research and planning efforts in CBDC, IADI members are encouraged to intensify their understanding of the potential impact of the introduction of a CBDC in their own as well as in other jurisdictions. To assess the potential impact of a CBDC, a sound understanding of operating models and design features is crucial. These will affect factors of key interest to deposit insurers, such as the degree of replacement of bank deposits by CBDC. Also, the implications of choices regarding operating models and design features extend to the division of labour between central and commercial banks and the degree of privacy attached to CBDC usage. The paper offers a review of key issues relevant to deposit insurers regarding operating models and design features for CBDC, and links these to early global policy standards. Whilst not recommending a particular CBDC design, deposit insurers are encouraged to develop a deeper understanding of the principles presented and how the different policy options may affect the provision of deposit insurance.

Suggested Citation

  • Van Roosebeke, Bert & Defina, Ryan, 2022. "Central Bank Digital Currencies: A Review of Operating Models and Design Issues," MPRA Paper 116240, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:116240
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    References listed on IDEAS

    as
    1. Raphael Auer & Rainer Boehme, 2021. "Central bank digital currency: the quest for minimally invasive technology," BIS Working Papers 948, Bank for International Settlements.
    2. 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.
    3. Anneke Kosse & Ilaria Mattei, 2022. "Gaining momentum – Results of the 2021 BIS survey on central bank digital currencies," BIS Papers, Bank for International Settlements, number 125.
    4. Van Roosebeke, Bert & Defina, Ryan, 2021. "Five Emerging Issues in Deposit Insurance," MPRA Paper 110713, University Library of Munich, Germany.
    5. Cyrus Minwalla, 2020. "Security of a CBDC," Staff Analytical Notes 2020-11, Bank of Canada.
    6. Morales-Resendiz, Raúl & Ponce, Jorge & Picardo, Pablo & Velasco, Andrés & Chen, Bobby & Sanz, León & Guiborg, Gabriela & Segendorff, Björn & Vasquez, José Luis & Arroyo, John & Aguirre, Illich & Hayn, 2021. "Implementing a retail CBDC: Lessons learned and key insights," Latin American Journal of Central Banking (previously Monetaria), Elsevier, vol. 2(1).
    7. Van Roosebeke, Bert & Defina, Ryan, 2021. "Central Bank Digital Currencies: The Motivation," MPRA Paper 111006, University Library of Munich, Germany.
    8. Bindseil, Ulrich, 2020. "Tiered CBDC and the financial system," Working Paper Series 2351, European Central Bank.
    9. Mr. Ashraf Khan & Majid Malaika, 2021. "Central Bank Risk Management, Fintech, and Cybersecurity," IMF Working Papers 2021/105, International Monetary Fund.
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    Cited by:

    1. Bert Van Roosebeke & Ryan Defina, 2023. "Deposit Insurance in 2023: Global Trends and Key Issues," IADI Research Papers 23-02, International Association of Deposit Insurers.

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    More about this item

    Keywords

    deposit insurance; bank resolution; CBDC;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation

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