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Expected Macroeconomic Effects of Issuing a Retail CBDC

Author

Listed:
  • Constanza Martínez-Ventura
  • Julián A. Parra-Polania
  • Tatiana Mora-Arbeláez
  • Angélica Lizarazo-Cuéllar

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. ******RESUMEN: Este documento revisa los potenciales efectos macroeconómicos de emitir una moneda digital de banco central (CBDC) para uso de las personas y negocios. Se realiza una selección cuidadosa de la arquitectura, y de los aspectos de diseño económico y tecnológico de esta forma de dinero digital que mejor se ajustarían a las necesidades de la economía colombiana, para enmarcar la aproximación analítica que se usa para estudiar estos temas. Se revisan los resultados más destacados de la literatura relacionada para establecer las consecuencias esperadas de adelantar esta iniciativa. Para el conjunto de supuestos seleccionados, encontramos que los efectos macroeconómicos esperados son muy pequeños.

Suggested Citation

  • Constanza Martínez-Ventura & Julián A. Parra-Polania & Tatiana Mora-Arbeláez & Angélica Lizarazo-Cuéllar, 2023. "Expected Macroeconomic Effects of Issuing a Retail CBDC," Borradores de Economia 1247, Banco de la Republica de Colombia.
    • Handle: RePEc:bdr:borrec:1247
    DOI: 10.32468/be.1247
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    More about this item

    Keywords

    CBDC; macroeconomic effects; digital money; financial intermediation; efectos macroeconómicos; dinero digital; intermediación financiera;
    All these keywords.

    JEL classification:

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

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