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Digital but not crypto: possible design pitfalls and rebound effects for green monetary policy using central bank digital currency

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  • Michael Stöckel

    (Berlin School of Economics and Law)

Abstract

This article examines the role of central bank digital currencies (CBDCs) in the context of central banks' efforts to green the financial system. It underscores the importance of CBDC design, particularly cautioning against the use of blockchain technology due to its energy-intensive nature. The argument posits that a conventional database is a more environmentally sustainable choice for CBDCs. The article provides a structured discussion on the background, theoretical considerations, climate-friendly interventions, and the potential impact of CBDCs. It aims to contribute to the ongoing debate by emphasizing the need for clear design choices in CBDC discussions, given the environmental concerns associated with certain technologies.

Suggested Citation

  • Michael Stöckel, 2025. "Digital but not crypto: possible design pitfalls and rebound effects for green monetary policy using central bank digital currency," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 15(2), pages 503-516, June.
    • Handle: RePEc:spr:eurase:v:15:y:2025:i:2:d:10.1007_s40822-024-00302-x
    DOI: 10.1007/s40822-024-00302-x
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    References listed on IDEAS

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    1. Peterson K. Ozili, 2022. "Circular Economy and Central Bank Digital Currency," Circular Economy and Sustainability, Springer, vol. 2(4), pages 1501-1516, December.
    2. Andrew Usher & Edona Reshidi & Francisco Rivadeneyra & Scott Hendry, 2021. "The Positive Case for a CBDC," Discussion Papers 2021-11, Bank of Canada.
    3. Emanuele Campiglio & Yannis Dafermos & Pierre Monnin & Josh Ryan-Collins & Guido Schotten & Misa Tanaka, 2018. "Climate change challenges for central banks and financial regulators," Nature Climate Change, Nature, vol. 8(6), pages 462-468, June.
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