Central Bank Digital Currency

The Federal Reserve Bank has posted an article Central Bank Digital Currency: A Literature Review.

Technological advances in recent years have led to a growing number of fast, electronic means of payment available to consumers for everyday transactions, raising questions for policymakers about the role of the public sector in providing a digital payment instrument for the modern economy.

I used to think about this more simply as the Federal Reserve providing accounts directly to consumers instead of through private banks. I thought of the Federal Reserve Bank a the wholesaler, and the private banks as the retailer. I think this article more or less confirms my view of it. I don’t think of central bank digital currency as inventing some kind of new currency. I think of it as just a change in the central bank’s business model.

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