Could CBDC be a threat to Monetary Policy?

Kód výsledku v IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F04274644%3A_____%2F22%3A%230000946" target="_blank" >RIV/04274644:_____/22:#0000946 - isvavai.cz</a>

Výsledek na webu

<a href="https://www.vsfs.cz/prilohy/konference_doktorandu_na_vysoke_skole_fi.pdf" target="_blank" >https://www.vsfs.cz/prilohy/konference_doktorandu_na_vysoke_skole_fi.pdf</a>

DOI - Digital Object Identifier

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Jazyk výsledku

angličtina

Název v původním jazyce

Could CBDC be a threat to Monetary Policy?

Popis výsledku v původním jazyce

Central Banks are generally exposed to the Effective Lower Bound (ELB) problem when conduction Monetary Policy (MP). It is not possible for a central bank (CB) to perform MP with negative interest rates over a significant period because market participants would convert their deposits into cash if costs for conversion, storage and insurance would be lower than costs for their remunerated deposits. With many CB contemplating Central Bank Digital Currencies (CBDC), this paper discusses the effects for MP under the restriction of the ELB. Under the assumption that the CB will implement a non-remunerated tier for CBDC to provide market participants with a cash like means of payment, it can be assumed that the ELB will increase from currently approximately -1% with only cash in existence, closer to zero when implementing CBDC. This is due to the lower costs of exchange, holdings and insurance when shifting deposits into a non-renumerated tier of CBDC instead of converting into cash in times of negative interest rates. Implementation of a tier of non-remunerated CBDC creates a significant “extra buffer” for market participants with a large destabilizing effect for MP which a CB needs to consider when performing MP at the ELB.

Název v anglickém jazyce

Could CBDC be a threat to Monetary Policy?

Popis výsledku anglicky

Central Banks are generally exposed to the Effective Lower Bound (ELB) problem when conduction Monetary Policy (MP). It is not possible for a central bank (CB) to perform MP with negative interest rates over a significant period because market participants would convert their deposits into cash if costs for conversion, storage and insurance would be lower than costs for their remunerated deposits. With many CB contemplating Central Bank Digital Currencies (CBDC), this paper discusses the effects for MP under the restriction of the ELB. Under the assumption that the CB will implement a non-remunerated tier for CBDC to provide market participants with a cash like means of payment, it can be assumed that the ELB will increase from currently approximately -1% with only cash in existence, closer to zero when implementing CBDC. This is due to the lower costs of exchange, holdings and insurance when shifting deposits into a non-renumerated tier of CBDC instead of converting into cash in times of negative interest rates. Implementation of a tier of non-remunerated CBDC creates a significant “extra buffer” for market participants with a large destabilizing effect for MP which a CB needs to consider when performing MP at the ELB.

Druh

D - Stať ve sborníku

CEP obor

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OECD FORD obor

50201 - Economic Theory

Projekt

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Návaznosti

S - Specificky vyzkum na vysokych skolach

Rok uplatnění

2022

Kód důvěrnosti údajů

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Název statě ve sborníku

Konference doktorandů na Vysoké škole finanční a správní 2022: prezentace výsledků společenskovědního výzkumu s ekonomickými a finančními efekty (9. ročník) = Doctoral Students Conference at the University of Finance and Administration 2022: presentation of the results of social science research with economic and financial effects (9th annual conference)

ISBN

9788074082504

ISSN

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e-ISSN

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Počet stran výsledku

12

Strana od-do

84-95

Název nakladatele

Vysoká škola finanční a správní

Místo vydání

Praha

Místo konání akce

Praha

Datum konání akce

15. 11. 2022

Typ akce podle státní příslušnosti

EUR - Evropská akce

Kód UT WoS článku

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