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Broadening narrow money: monetary policy with a central bank digital currency

Author

Listed:
  • Meaning, Jack

    (Bank of England)

  • Dyson, Ben

    (Bank of England)

  • Barker, James

    (University of Exeter)

  • Clayton, Emily

    (Bank of England)

Abstract

This paper discusses central bank digital currency (CBDC) and its potential impact on the monetary transmission mechanism. We first offer a general definition of CBDC which should make the concept accessible to a wide range of economists and policy practitioners. We then investigate how CBDC could affect the various stages of transmission, from markets for central bank money to the real economy. We conclude that monetary policy would be able to operate much as it does now, by varying the price or quantity of central bank money, and that transmission may even strengthen for a given change in policy instruments.

Suggested Citation

  • Meaning, Jack & Dyson, Ben & Barker, James & Clayton, Emily, 2018. "Broadening narrow money: monetary policy with a central bank digital currency," Bank of England working papers 724, Bank of England.
    • Handle: RePEc:boe:boeewp:0724
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    File URL: https://www.bankofengland.co.uk/-/media/boe/files/working-paper/2018/broadening-narrow-money-monetary-policy-with-a-central-bank-digital-currency.pdf?la=en&hash=26851CF9F5C49C9CDBA95561581EF8B4A8AFFA52
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    More about this item

    Keywords

    Central bank digital currency; money; monetary policy; cryptocurrency;
    All these keywords.

    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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