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The Case for Central Bank Electronic Money and the Non-case for Central Bank Cryptocurrencies

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  • Aleksander Berentsen
  • Fabian Schär

Abstract

We characterize various currencies according to their control structure, focusing on cryptocurrencies such as Bitcoin and government-issued fiat money. We then argue that there is a large unmet demand for a liquid asset that allows households and firms to save outside of the private financial sector.

Suggested Citation

  • Aleksander Berentsen & Fabian Schär, 2018. "The Case for Central Bank Electronic Money and the Non-case for Central Bank Cryptocurrencies," Review, Federal Reserve Bank of St. Louis, vol. 100(2), pages 97-106.
    • Handle: RePEc:fip:fedlrv:00097
    DOI: 10.20955/r.2018.97-106
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    References listed on IDEAS

    as
    1. Berentsen, Aleksander & Kraenzlin, Sébastien & Müller, Benjamin, 2018. "Exit strategies for monetary policy," Journal of Monetary Economics, Elsevier, vol. 99(C), pages 20-40.
    2. Aleksander Berentsen & Nicole Jonker & Malte Krueger & Harry Leinonen & Katharina Linsbauer & Nikos Passas & Fabian Schär & Friederich Schneider & Paolo Tasca & Jens Ulbrich, 2016. "Cash on Trial," SUERF Studies, SUERF - The European Money and Finance Forum, number 2016/1 edited by Christian Beer & Ernest Gnan & Urs W. Birchler, May.
    3. Mr. Michael Kumhof & Mr. Jaromir Benes, 2012. "The Chicago Plan Revisited," IMF Working Papers 2012/202, International Monetary Fund.
    4. Kenneth S. Rogoff, 2016. "The Curse of Cash," Economics Books, Princeton University Press, edition 1, number 10798.
    5. Williamson, Stephen & Wright, Randall, 2010. "New Monetarist Economics: Models," Handbook of Monetary Economics, in: Benjamin M. Friedman & Michael Woodford (ed.), Handbook of Monetary Economics, edition 1, volume 3, chapter 2, pages 25-96, Elsevier.
    6. Aleksander Berentsen & Fabian Schär, 2018. "A Short Introduction to the World of Cryptocurrencies," Review, Federal Reserve Bank of St. Louis, vol. 100(1), pages 1-16.
    7. Aleksander Berentsen & Alessandro Marchesiani & Christopher Waller, 2014. "Floor Systems for Implementing Monetary Policy: Some Unpleasant Fiscal Arithmetic," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 17(3), pages 523-542, July.
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    More about this item

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • E59 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Other
    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General

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