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Cash Use Across Countries and the Demand for Central Bank Digital Currency

2019-03-01 Business & Economics
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Release : 2019-03-01
Genre : Business & Economics
Kind : eBook
Book Rating : 609/5 ( reviews)

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Book Synopsis Cash Use Across Countries and the Demand for Central Bank Digital Currency by : Mr.Tanai Khiaonarong

Download or read book Cash Use Across Countries and the Demand for Central Bank Digital Currency written by Mr.Tanai Khiaonarong. This book was released on 2019-03-01. Available in PDF, EPUB and Kindle. Book excerpt: The level and trend in cash use in a country will influence the demand for central bank digital currency (CBDC). While access to digital currency will be more convenient than traveling to an ATM, it only makes CBDC like a bank debit card—not better. Demand for digital currency will thus be weak in countries where cash use is already very low, due to a preference for cash substitutes (cards, electronic money, mobile phone payments). Where cash use is very high, demand should be stronger, due to a lack of cash substitutes. As the demand for CBDC is tied to the current level of cash use, we estimate the level and trend in cash use for 11 countries using four different measures. A tentative forecast of cash use is also made. After showing that declining cash use is largely associated with demographic change, we tie the level of cash use to the likely demand for CBDC in different countries. In this process, we suggest that one measure of cash use is more useful than the others. If cash is important for monetary policy, payment instrument competition, or as an alternative payment instrument in the event of operational problems with privately supplied payment methods, the introduction of CBDC may best be introduced before cash substitutes become so ubiquitous that the viability of CBDC could be in doubt.

Cash Use Across Countries and the Demand for Central Bank Digital Currency

2019-03-01 Business & Economics
Download Cash Use Across Countries and the Demand for Central Bank Digital Currency PDF Online Free

Author :
Release : 2019-03-01
Genre : Business & Economics
Kind : eBook
Book Rating : 827/5 ( reviews)

GET EBOOK


Book Synopsis Cash Use Across Countries and the Demand for Central Bank Digital Currency by : Mr.Tanai Khiaonarong

Download or read book Cash Use Across Countries and the Demand for Central Bank Digital Currency written by Mr.Tanai Khiaonarong. This book was released on 2019-03-01. Available in PDF, EPUB and Kindle. Book excerpt: The level and trend in cash use in a country will influence the demand for central bank digital currency (CBDC). While access to digital currency will be more convenient than traveling to an ATM, it only makes CBDC like a bank debit card—not better. Demand for digital currency will thus be weak in countries where cash use is already very low, due to a preference for cash substitutes (cards, electronic money, mobile phone payments). Where cash use is very high, demand should be stronger, due to a lack of cash substitutes. As the demand for CBDC is tied to the current level of cash use, we estimate the level and trend in cash use for 11 countries using four different measures. A tentative forecast of cash use is also made. After showing that declining cash use is largely associated with demographic change, we tie the level of cash use to the likely demand for CBDC in different countries. In this process, we suggest that one measure of cash use is more useful than the others. If cash is important for monetary policy, payment instrument competition, or as an alternative payment instrument in the event of operational problems with privately supplied payment methods, the introduction of CBDC may best be introduced before cash substitutes become so ubiquitous that the viability of CBDC could be in doubt.

Falling Use of Cash and Demand for Retail Central Bank Digital Currency

2022-02-04 Business & Economics
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Release : 2022-02-04
Genre : Business & Economics
Kind : eBook
Book Rating : /5 ( reviews)

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Book Synopsis Falling Use of Cash and Demand for Retail Central Bank Digital Currency by : Mr. Tanai Khiaonarong

Download or read book Falling Use of Cash and Demand for Retail Central Bank Digital Currency written by Mr. Tanai Khiaonarong. This book was released on 2022-02-04. Available in PDF, EPUB and Kindle. Book excerpt: Cash use in most countries is falling slowly. On the margin, younger adults favor cash substitutes over cash. For older adults it is the reverse. Revealed preference tied to a changing population age structure seems to be the main influence on the demand for cash and why it is falling. Cash use may continue to fall, and card use (the main cash substitute) may fall by more, if CBDC is issued. The extent of this reduction depends on the demand for retail CBDC and the incentives (primarily transaction fees) that can play a determining role in CBDC adoption and use.

The Rise of Digital Money

2019-07-15 Business & Economics
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Release : 2019-07-15
Genre : Business & Economics
Kind : eBook
Book Rating : 908/5 ( reviews)

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Book Synopsis The Rise of Digital Money by : Mr.Tobias Adrian

Download or read book The Rise of Digital Money written by Mr.Tobias Adrian. This book was released on 2019-07-15. Available in PDF, EPUB and Kindle. Book excerpt: This paper marks the launch of a new IMF series, Fintech Notes. Building on years of IMF staff work, it will explore pressing topics in the digital economy and be issued periodically. The series will carry work by IMF staff and will seek to provide insight into the intersection of technology and the global economy. The Rise of Digital Money analyses how technology companies are stepping up competition to large banks and credit card companies. Digital forms of money are increasingly in the wallets of consumers as well as in the minds of policymakers. Cash and bank deposits are battling with so-called e-money, electronically stored monetary value denominated in, and pegged to, a currency like the euro or the dollar. This paper identifies the benefits and risks and highlights regulatory issues that are likely to emerge with a broader adoption of stablecoins. The paper also highlights the risks associated with e-money: potential creation of new monopolies; threats to weaker currencies; concerns about consumer protection and financial stability; and the risk of fostering illegal activities, among others.

Designing Central Bank Digital Currencies

2019-11-18 Business & Economics
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Release : 2019-11-18
Genre : Business & Economics
Kind : eBook
Book Rating : 883/5 ( reviews)

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Book Synopsis Designing Central Bank Digital Currencies by : Mr.Itai Agur

Download or read book Designing Central Bank Digital Currencies written by Mr.Itai Agur. This book was released on 2019-11-18. Available in PDF, EPUB and Kindle. Book excerpt: We study the optimal design of a central bank digital currency (CBDC) in an environment where agents sort into cash, CBDC and bank deposits according to their preferences over anonymity and security; and where network effects make the convenience of payment instruments dependent on the number of their users. CBDC can be designed with attributes similar to cash or deposits, and can be interest-bearing: a CBDC that closely competes with deposits depresses bank credit and output, while a cash-like CBDC may lead to the disappearance of cash. Then, the optimal CBDC design trades off bank intermediation against the social value of maintaining diverse payment instruments. When network effects matter, an interest-bearing CBDC alleviates the central bank's tradeoff.

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