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Financial Stability Implications of CBDC

Author

Listed:
  • Francesca Carapella

    (Federal Reserve Board)

  • Jin-Wook Chang

    (Federal Reserve Board)

  • Sebastian Infante

    (Federal Reserve Board)

  • Melissa Leistra

    (Federal Reserve Board)

  • Arazi Lubis

    (Federal Reserve Board)

  • Alexandros P. Vardoulakis

    (Federal Reserve Board)

Abstract

A central bank digital currency (CBDC) is a form of digital money that is denominated in the national unit of account, constitutes a direct liability of the central bank, and can be distinguished from other central bank liabilities. We examine the financial stability risks and benefits of issuing a CBDC under different design options. Our analysis is based on lessons derived from historical case studies as well as on an analytical framework that allows us to characterize the mechanisms through which a CBDC can affect financial stability. We further discuss various policy tools that can be employed to mitigate financial stability risks.

Suggested Citation

  • Francesca Carapella & Jin-Wook Chang & Sebastian Infante & Melissa Leistra & Arazi Lubis & Alexandros P. Vardoulakis, 2026. "Financial Stability Implications of CBDC," International Journal of Central Banking, International Journal of Central Banking, vol. 22(3), pages 337-388, July.
    • Handle: RePEc:ijc:ijcjou:y:2026:q:3:a:8
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    File URL: https://www.ijcb.org/journal/v22n3/financial-stability-implications-cbdc
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