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Getting the balance right: Crypto, stablecoin and central bank digital currency

Author

Listed:
  • Bolt, Wilko

    (Senior Economist, Dutch Central Bank, The Netherlands)

  • Lubbersen, Vera

    (Economist, Dutch Central Bank, The Netherlands)

  • Wierts, Peter

    (Senior Economist, Dutch Central Bank, The Netherlands)

Abstract

The rise of new forms of private money is reviving a long-standing debate on the appropriate balance between private and public interests in money and payments. This paper provides an integrated policy analysis of various digital assets that may function as money, namely, bank deposits, non-backed cryptos, stablecoins and central bank digital currency (CBDC). This paper argues that public and private money need to coexist in order to get the best of both worlds, that is, trust and innovation. Getting the balance right, however, is no easy task. It requires a digital update of public money and the effective regulation of cryptos and stablecoins. This paper argues that convertibility between public and private money should be a leading principle both for the design of CBDC and for the regulation of stablecoins with the potential to be widely adopted as a means of payment.

Suggested Citation

  • Bolt, Wilko & Lubbersen, Vera & Wierts, Peter, 2022. "Getting the balance right: Crypto, stablecoin and central bank digital currency," Journal of Payments Strategy & Systems, Henry Stewart Publications, vol. 16(1), pages 39-50, March.
    • Handle: RePEc:aza:jpss00:y:2022:v:16:i:1:p:39-50
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    Citations

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    Cited by:

    1. Ozili, Peterson K, 2023. "Central bank digital currency in India: the case for a digital rupee," MPRA Paper 118801, University Library of Munich, Germany.

    More about this item

    Keywords

    digital payments; cryptos; stablecoins; CBDC; regulation;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit

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