scholarly journals Digital Euro: A (Digital) Symbol of Progress and Integration in Europe

2021 ◽  
Vol 9 (1) ◽  
pp. 74-82
Author(s):  
Camelia Ignatescu ◽  
Raluca Onufreiciuc
Keyword(s):  
Central Bank ◽  
Central Banks ◽  
Bank Deposits ◽  
Distributed Ledger ◽  
Distributed Ledger Technology ◽  
Central Bank Money ◽  
If Current ◽  
Bank Money ◽  
Digital Assets ◽  
Digital Symbol

The emergence of crypto assets such as Bitcoin and Ether exposed a number of advantages that these digital assets based on distributed ledger technology (DLTs) can offer. As cash is becoming less and less popular in the eurozone, the European Central Bank (ECB) is currently looking at the scenario of creating a digital euro as a kind of central bank money that may be used by the general public. DLT may be used to tokenize central bank money via digital currencies (CBDCs) issued by central banks, as well as to digitally represent bank deposits. The purpose of this article is to analyse what are the solutions for the future digitization of the monetary and financial systems and if current CBDC projects and prototypes, including those by the Chinese and Swedish central banks and the attempts of the ECB, have the chance to succeed with or without DLT.

scholarly journals On the money creation approach to banking

2021 ◽  
Author(s):  
Salomon Faure ◽  
Hans Gersbach
Keyword(s):  
Monetary Policy ◽  
Commercial Banks ◽  
Central Banks ◽  
Capital Regulation ◽  
Bank Deposits ◽  
Central Bank Money ◽  
Money Creation ◽  
Asset Purchases ◽  
Bank Equity ◽  
Bank Money

AbstractWe study today’s two-tier money creation and destruction system: Commercial banks create bank deposits (privately created money) through loans to firms or asset purchases from the private sector. Bank deposits are destroyed when households buy bank equity or when firms repay loans. Central banks create electronic central bank money (publicly created money or reserves) through loans to commercial banks. In a simple general equilibrium setting, we show that symmetric equilibria yield the first-best level of money creation and lending when prices are flexible, regardless of monetary policy and capital regulation. When prices are rigid, we identify the circumstances in which money creation is excessive or breaks down and the ones in which an adequate combination of monetary policy and capital regulation can restore efficiency. Finally, we provide a series of extensions and generalizations of the results.

scholarly journals RBI Distributed Ledger Technology and Blockchain - A Future of Decentralized India

2020 ◽  
pp. 227-237
Author(s):  
Bhuvana R. ◽  
P. S. Aithal
Keyword(s):  
Central Bank ◽  
New Technologies ◽  
Secondary Data ◽  
Central Banks ◽  
Central Banking ◽  
Indian Government ◽  
Blockchain Technology ◽  
Distributed Ledger ◽  
Distributed Ledger Technology ◽  
Monetary Economy

Despite various countries getting hands-on technology such as blockchain for banking, transaction, and multiple benefits, a developing country such as India must use these technologies because of the advantages it provides in order to keep pace. In the age of digital currencies and new emerging technologies, central banking is a fast-growing topic in the monetary economy. Cryptocurrencies, blockchain, and distributed Ledger technologies appear to be feasible rivals to Fiat Currency central bank. Blockchain technology's influence behind Cryptocurrencies. Cryptocurrencies have the ability to boost payments and operations by central banks and serve as a forum from which central banks could Perhaps launch their own digital currencies. RBI Indian central bank is no less important when it comes to technology that would pave the way for the new economy, enriched with technology-centric growth momentum, by increasing support from India's reserve bank and the Indian government for innovation and integrating technologies through regulatory sandboxes and various other systems. This article illustrates distributed ledger technology in the Indian context. The secondary data were obtained from various scholarly journals and websites. We have analysed distributed ledger technology, India’s move towards learning new technologies, different central banks distributed ledger project and examined blockchain technology in the Indian market using the SWOC framework as a research case study.

scholarly journals Use of distributed ledger technology by central banks: A review

Enfoque UTE ◽  
2017 ◽  
Vol 8 (5) ◽  
pp. 1-13 ◽  
Author(s):  
César A. Del Río
Keyword(s):  
Central Bank ◽  
Network Effects ◽  
Central Banks ◽  
Distributed Ledger ◽  
Distributed Ledger Technology

This paper reviews what stage the central banks of the world’s leading economies are at in their study and adoption of distributed ledger technology (DLT) to reengineer their various systems and functions. A brief description of DLT will be given, followed by an analysis of central banks’ publications and pronouncements to determine what each central bank is doing on their journey to DLT adoption. It was found that of the central banks for which information was available, all of them have expressed interest in DLT and have evaluated it to some extent. Nevertheless, no central bank has an operational DLT-based system at this point. This is because some issues remain regarding the speed, cost of processing, security, transparency and privacy, legal settlement finality, scalability and network effects of the technology. As DLT matures, the expectation is that these issues will begin to be resolved.

Issuing Financial Money of Ultimate Quality

2019 ◽  
pp. 30-82
Author(s):  
Ulrich Bindseil
Keyword(s):  
Central Bank ◽  
Large Scale ◽  
Central Banks ◽  
Central Banking ◽  
Theory And Practice ◽  
Financial Assets ◽  
Central Bank Money ◽  
Bank Money

The essence of central banking is the issuance of central bank money—being itself defined as dominant financial money used at a large scale for payments and being of the highest possible credit and liquidity quality amongst all financial assets, such that payment through it is accepted as settlement of any other financial claim. This chapter elaborates on the nature of central bank money and reviews the pre-1800 theory and practice of central bank money issuance. It is shown that the nature of central bank money and its benefits were well understood by early authors. Moreover, the 25 central banks that issued (or at least aimed at) issuing central bank money before 1800 are introduced. The types of central bank money (deposits, banknotes, certificates of deposits) are briefly reviewed.

Lender of Last Resort

2019 ◽  
pp. 136-154
Author(s):  
Ulrich Bindseil
Keyword(s):  
Central Bank ◽  
Financial Stability ◽  
Debt Crisis ◽  
Central Banks ◽  
Central Banking ◽  
Lender Of Last Resort ◽  
Central Bank Money ◽  
Bank Of England ◽  
European Debt Crisis ◽  
Bank Money

The recent central banking literature often argues that the LOLR function would be the key feature defining a ‘modern’ central bank. This chapter argues that this view may appear too radical (despite the enormous benefits of the LOLR) as the appearance of the LOLR does not change the nature of central banking (which is primarily associated with the issuance of central bank money). After providing an overview of the roles of central banks for financial stability, the chapter focuses on one early LOLR episode, namely the measures of the Hamburger Bank, Bank of Amsterdam and Bank of England in the European debt crisis of 1763. It is shown that in particular the Hamburger Bank acted as systemic lender of last resort, comparable to what modern central banks did in 2008.

Central Banking before 1800

2019 ◽  
Author(s):  
Ulrich Bindseil
Keyword(s):  
Central Bank ◽  
Central Banks ◽  
Central Banking ◽  
Natural Monopoly ◽  
European Continent ◽  
Central Bank Money ◽  
As Species ◽  
Policy Objectives ◽  
The 19Th Century ◽  
Bank Money

During the 20th century, a view established itself, according to which (a) defining central banking would be difficult, (b) the Sveriges Riksbank (established in 1668) and the Bank of England (established in 1694) would have been the first central banks, (c) although at that time central banks did not have a policy mandate and no concept of central banking would have existed before the 19th century. This book challenges these views and rehabilitates pre-1800 central banking, including the role of numerous other institutions, mainly on the European continent. Central banking should be defined as being associated with the issuance of “central bank money”, i.e. financial money of the highest possible credit quality, that is accepted for settlement of any other financial claim in the same way as species money is accepted as it is considered credit, liquidity and market risk free, to use modern terminology. Issuing central bank money is a natural monopoly, and therefore central banks were always based on public charters regulating them and giving them a unique role in a sovereign territorial entity. Many early central banks were not only based on a public charter but were also publicly owned and managed, and had well defined policy objectives. The book reviews these policy objectives and the financial operations of 25 central banks established before 1800. The book shows that many of the central bank controversies debated today actually date back to the period 1400-1800.

scholarly journals Rethinking Monetary Sovereignty: The Global Credit Money System and the State

2020 ◽  
Author(s):  
Jens van 't Klooster ◽  
Steffen Murau
Keyword(s):  
Economic Policy ◽  
Central Bank ◽  
Crucial Role ◽  
The State ◽  
Financial Globalization ◽  
Shadow Banks ◽  
Monetary System ◽  
Central Bank Money ◽  
Policy Objectives ◽  
Bank Money

This article proposes a conception of monetary sovereignty that recognizes the reality of today’s global credit money system. Monetary sovereignty is typically used in a Westphalian sense to denote the ability of states to issue and regulate their own currency. This article rejects the Westphalian conception. Instead, it proposes a conception of effective monetary sovereignty that focuses attention on what states are actually able to do in the era of financial globalization. The conception fits the hybridity of the modern credit money system by acknowledging the crucial role not only of central bank money but also of money issued by regulated banks and unregulated shadow banks. These institutions often operate ‘offshore’, outside of a state’s legal jurisdiction, which makes monetary governance more difficult. Monetary sovereignty consists in the ability of states to effectively govern these different segments of the monetary system and thereby achieve their economic policy objectives.

scholarly journals Central Banks

2021 ◽  
pp. 11-28
Author(s):  
Ulrich Bindseil ◽  
Alessio Fotia
Keyword(s):  
Central Bank ◽  
Commercial Banks ◽  
Balance Sheet ◽  
Banking System ◽  
Central Banks ◽  
Reserve Requirement ◽  
Money Creation ◽  
Reserve Banking ◽  
Bank Money

AbstractThis chapter develops further the role of a central bank and its interplay with commercial banks. Together, the two ensure the provision of liquidity to the economy, such that the real sectors are shielded from flows of funds originating from household and investors. We also disaggregate the banking system into two banks to represent deposit flows between banks and their impact on the central bank’s balance sheet, and to distinguish between what we call “relative” and “absolute” central bank intermediation. We then integrate deposit money creation by commercial banks into our system of financial accounts, and revisit some old debates, such as the limits of bank money creation and the role of related parameters that the central bank can set (not only the reserve requirement ratio, but also the collateral framework). Finally, we explain the concepts of “plain money” and “full reserve banking” within the financial accounts, and also discuss in this framework the recent proposals regarding central bank digital currency (CBDC).

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