Central Bank Digital Currencies and Distributed Ledger Technology

Summary

The debate on Central Bank Digital Currencies (CBDCs) was triggered by the emergence of cryptocurrencies like Bitcoin on the one hand, which may compete with traditional central bank money, and the trend towards the disappearance of cash in some countries on the other hand.

Key points

• Key points:
• DLT Fundamentals: Blockchain and DLT: basic concepts, DLT as payment rails, Cryptocurrencies: basics and types.
• CBDC Fundamentals: The problems of cash, Current wholesale and retail payment systems, CBDCs: basics and types, Central Banks and Monetary Policy Management in a digital world.
• DLT as an infrastructure for CBDCs: DLT-based vs non-DLT-based CBDCs: alternatives and advantages, DLT models for CBDCs: public, permissioned, hybrid? Scalability and other issues, Wholesale CBDC models: managing collateral, Retail CBDC models: dealing with anonymity, The first-mover effect.

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