scholarly journals Digital currencies of central banks and the position of the digital ruble

2021 ◽  
Vol 27 (5) ◽  
pp. 1058-1073
Author(s):  
Aleksei V. MASLOV ◽  
Kristina V. SHVANDAR ◽  
Yuliya A. MAKLAKOVA

Subject. The article discusses the digital currency of central banks. Objectives. The study focuses on the nature and functions of digital currencies of central banks so as to evaluate how they could be implemented into domestic and external economic processes. We also analyze the best existing practices of creating digital currencies in central banks. Methods. The study is based on methods of logic, comparative and statistical analysis. Results. We analyze how virtual currencies originate and evolve, and examine what may make central banks regulate them. Virtual and digital currencies are analyzed and interpreted as we see the matter. We scrutinize how digital currencies are implemented worldwide, and extensively analyze the future of the Russian digital currency of the central bank. The article reviews materials of the Bank of Russia on the implementation of the digital ruble, evaluating advantages of doing it in various economic sectors. Conclusions and Relevance. We herein analyze risks of virtual and digital currencies and evaluate the future of implementation of central banks’ digital currencies. The article outlines the future and risks of the digital ruble and benefits of using it across economic sectors (the State, business, individuals, etc.). The issues has not be sufficiently studied scientifically and practically, continuing our own research into the matter. The article spotlights some disputable issues. The findings can be used by the Bank of Russia and commercial banks.

Author(s):  
E. Myasnikova ◽  
L. Voskresenskaya

The article is devoted to the discussion of the prospect of issuing in Russia the digital currency of the Central Bank - the digital ruble. The properties and characteristics of the digital ruble, models of the functioning of the digital currency are considered. The place of the Central Bank in the process of functioning of the platform for the production of digital rudders shown. The main stages of development and implementation of the digital ruble are presented. Expert assessments of the possibilities and consequences of the introduction of the digital ruble are discussed. The impact of the digital ruble of the Central Bank on the financial system and the potential risks of introducing a digital currency are assessed. A comparative analysis of technologies for creating a digital ruble platform been carried out. The strategies of the central banks of various countries in creating models and mechanisms for issuing digital currencies into circulation are considered. Conclusions are made about the prospects for the introduction of the digital ruble in Russia. It noted that the problem of choosing the organization of the circulation of digital currency remains unresolved. Model C creates an excessive load of settlements on the Central Bank; Model D distributes the settlement load among commercial banks, which greatly increases the risks of clients – legal entities and individuals.


2021 ◽  
Vol 3 (10) ◽  
pp. 27-35
Author(s):  
E. V. Zenkina ◽  
◽  
A. S. Kharlanov ◽  

The relevance and importance of the article is due to the increasing practical importance of the evolution of the digital currencies of the central banks of the future due to the fact that globalization requires new payment instruments. We analyzed the understanding of the essence of money and its future, the reasons for the appearance, features and risks of the digital currency of the central bank. Recommendations are proposed to change the functions of national banks, in the field of the need to make digital money of central banks anonymous and facilitate payment by them. It was concluded that at present the digital currency of the central bank is a fashionable answer to the transition to the new digital world, but at the moment it is losing competition to cryptocurrencies.


2021 ◽  
Vol 2021 (2) ◽  
pp. 26-48
Author(s):  
Volodymyr MISHCHENKO ◽  
◽  
Svitlana NAUMENKOVA ◽  
Svitlana MISHCHENKO ◽  
◽  
...  

The purpose of the article is to reveal the essence and features of the introduction of digital currency of central banks and their impact on the conditions of monetary policy, financial stability, as well as institutional transformations in the development of national banking systems. The study is based on an analysis of projects of issuance and use of digital currencies of the ECB and central banks of leading countries, as well as the results of pilot projects of the National Bank of China on the use of the digital yuan and NBU on the e-hryvnia circulation. It is proved that digital currency of the central bank should be considered as a new dematerialized form of national currency in addition to cash and non-cash forms. Particular attention is paid to the study of the impact of the use of digital currency by central banks on the main parameters of economic policy. The main directions of potential influence of digital currency use on transformation of mechanisms of realization of monetary, budgetary and tax, macroprudential policy, maintenance of financial stability, activization of action of channels of the monetary transmission mechanism, and also on reforming of system of the state financial monitoring and bank supervision are substantiated. It is determined that one of the consequences of the use of digital currency will be the ability to ensure full control over all monetary transactions, which will help reduce the shadow economy and corruption. Structural and logical schemes of centralized and decentralized models of issuance and circulation of digital currency of central bank have been developed, directions of changes in the structure and functions of commercial and central banks, as well as in the structure of the financial and credit system in general have been substantiated.


2019 ◽  
pp. 94-100
Author(s):  
T.S. Hudima ◽  
V.A. Ustymenko

The article is devoted to identifying the peculiarities of the central bank digital currency (CBDC), explaining their impact on the monetary policy of the state, and identifying the prospects for the transformation of domestic banking legislation in connection with the implementation of the CBDC. It is noted that the scope of competence of the Central Bank and the legal basis for the issuance of the CBDC will depend on the economic and legal features of the digital currency, the degree of its impact on the monetary policy, the financial stability of the country’s economy and so on. In the process of forming the appropriate legal field and defining the conceptual apparatus in the sphere of emission and circulation of the CBDC, the peculiarities of the use of the latter in economic transactions and the specific functions not inherent in ordinary means of payment should be taken. СBDC initiatives will help: 1) progressively narrow the banking system at the level of the Central Banks (such as the Chicago Plan) by allowing individuals and businesses to deposit directly into the accounts of the Central Banks; 2) increasing confidence of economic entities and individuals in the financial system; 3) strengthening the financial stability of the economy (both domestically and globally). Granting business entities or individuals the right to store digital money directly with the Central Bank can give rise to two main directions of influence on monetary policy: first, to strengthen its transmission mechanism; secondly, lead to banks being disrupted. This may lead to some legal issues regarding (1) the NBU’s area of competence; (2) the constitutional foundations of the legal economic order (Article 5 of the ECU). In particular, it cannot be ruled out that centralization of the production, servicing, and management of the СBDC turnover may violate the principles of competition in business activities, prevent abuse of monopoly position in the market, etc. Keywords: monetary policy, central bank digital currency, financial stability, competence, legal framework, economic operations, issue.


2021 ◽  
Vol 9 (1) ◽  
pp. 43-60
Author(s):  
Jacob Stevens ◽  

This paper models a representative bank, and uses this model to explore the assumptions and implications of a selection of money-creation theories. It is shown that the money-supply process tends toward the logic of exogeneity as banks' fears about liquidity stress increases. At present, banks do not fear liquidity stress because central banks are operating under a floor system with a superabundance of reserves following unsterilized quantitative easing. Secondly, a role for a ‘central-bank digital currency’ is suggested as a useful complement to reserves policy in an economy with large or collusive banks.


Cryptoassets ◽  
2019 ◽  
pp. 307-340 ◽  
Author(s):  
Tommaso Mancini-Griffoli ◽  
Maria Soledad Martinez Peria ◽  
Itai Agur ◽  
Anil Ari ◽  
John Kiff ◽  
...  

Several central banks have begun actively investigating the possibility of issuing central bank digital currency (CBDC). This new central bank liability would be a widely accessible digital form of fiat money, intended as legal tender. This chapter aims to answer a simple question: Does CBDC offer benefits? On the demand side, would it satisfy end user needs better than other forms of money? And on the supply side, would issuing CBDC allow central banks to more effectively satisfy public policy goals, including financial inclusion, operational efficiency, financial stability, monetary policy effectiveness, and financial integrity? In short, is CBDC a desirable form of money given existing and rapidly evolving alternatives? The chapter includes a summary of pilot projects and studies from central banks exploring the possibility of issuing CBDC. The analysis is based on publicly issued materials and discussions with staff members at central banks and technology providers around the world.


2019 ◽  
Vol 8 (1) ◽  
pp. 125-151
Author(s):  
Muhammad Edhie Purnawan ◽  
Retno Riyanti

Entering the millennial era, technology has taken a big role in most sectors of life, including the currency as a product that can only be issued by the central bank. This paper examines the significant effect of central bank digital currency (CBDC) on the design of central bank monetary policy. The paper then sets out some benchmark central bank digital currency (CBDC) in several countries. Many central banks are actively exploring the initiation of sovereign digital currencies. Primary results this study is CBDC providing new monetary instruments, CBDC can improve financial inclusion, and CBDC is potential improvements in monetary policy transmission.


2021 ◽  
Vol 9 (1) ◽  
pp. 1
Author(s):  
Arto Kovanen

Sustained decline in central banks’ monetary liabilities (reserves and currency in circulation), which the emergency of cryptocurrencies may have hastened, has been enabled by technological innovations that over time have allowed financial institutions and their customers to execute transactions and settle their debts without resorting to central bank currency. Policymakers are concerned about their ability to guarantee public’s access to government-backed currency. This has implications for central banks’ balance sheet and income position, which central bank digital currency might reconstitute. But the introduction of central bank digital currency (CBDC) comes with its own risks and could be disruptive for financial markets. We believe that retaining the option to have access to government-guaranteed currency is of utmost importance, despite the sporadic demand for physical currency in the modern society, but it could be addressed within existing institutional structures without the introduction of CBDC. However, policy authorities are right in seeking oversight and regulation for cryptocurrencies to address the destabilizing potential of cryptocurrencies for financial markets, and they should continue modernizing payment infrastructures to bring retail settlement systems at par with cryptocurrencies in terms of settlement speed but without associated liquidity and credit risks. These steps would preserve the status quo and allow private sector to continue innovating while limiting central banks’ footprint in the financial markets.


Author(s):  
Ulrich Bindseil ◽  
Alessio Fotia

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).


2021 ◽  
Vol 37 (2) ◽  
pp. 205-240
Author(s):  
Dmitry Kochergin ◽  

The article examines modern models of digital currency systems of central banks (CBDC) for retail payments and wholesale settlements. The study gives economic interpretation and defines the key characteristics of central bank digital currencies, identifies the features of the main models of digital currencies systems and analyzes the most advanced national implementation projects of CBDC. The study concludes that the digital currencies of central banks are a new (digital) form of fiat money. The implementation of digital currencies of central banks is due to the need to improve the efficiency of the monetary and payment systems and is aimed at preserving of the central banks as a monetary issuer. The main advantages of digital currencies for retail payments are the offer of a highly liquid, low-risk and universally accessible means of payment. The key benefits of wholesale digital currencies are to provide faster, safer, and cheaper cross-border payments. Among the models of digital currencies systems for retail payments (R-CBDC) the model of hybrid system is characterized by the best reliability and speed when processing a large number of payment transactions. Therefore, these systems are the most promising for implementation. Between the models of systems for wholesale payments (W-CBDC) systems with a universal digital currency are the most suitable for eliminating the main problems of cross-border payments. However, the implementation of such systems may require a large number of technological, managerial and financial changes in the payment systems of central banks. Currently, the most advanced project for issuing R-CBDC is the DCEP system of the People’s Bank of China, which is implemented on the basis of a hybrid model. W-CBDC projects are implemented jointly by the central banks of the leading countries, as they require financial and technological unification of settlements. Most projects of W-CBDC involve the use of systems with a convertible or universal digital currency.


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