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Expected Macroeconomic Effects of Issuing a Retail Central Bank Digital Currency (CBDC)

Author

Listed:
  • Martínez-Ventura , Constanza

    (Leading Analyst, Banco de la República)

  • Parra-Polanía, Julián A.

    (Leading Economist, Banco de la República)

  • Mora-Arbeláez, Tatiana

    (Senior Analyst, Banco de la República)

  • Lizarazo-Cuéllar, Angélica

    (Senior Analyst, Banco de la República)

Abstract

This document reviews the potential macroeconomic effects of issuing a central bank digital currency (CBDC) for the use of individuals and businesses. A careful selection of the architecture, and the economic and technological design aspects of this digital form of central bank money that best suit the needs of Colombian economy is made to frame the analytical approach used to study these issues. The most salient results of the related literature are reviewed to establish the consequences of undertaking this initiative. For the set of selected assumptions, we find that the expected macroeconomic consequences are negligible.

Suggested Citation

  • Martínez-Ventura , Constanza & Parra-Polanía, Julián A. & Mora-Arbeláez, Tatiana & Lizarazo-Cuéllar, Angélica, 2023. "Expected Macroeconomic Effects of Issuing a Retail Central Bank Digital Currency (CBDC)," Coyuntura Económica, Fedesarrollo, vol. 53, pages 151-177, December.
    • Handle: RePEc:col:000438:021123
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    File URL: http://hdl.handle.net/11445/4515
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    More about this item

    Keywords

    Retail CBDC; Macroeconomic Eeffects; Digital Money Financial Intermediation;
    All these keywords.

    JEL classification:

    • E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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