US Fed economists examine the “intrinsic” value drivers of CBDCs


The US Federal Reserve expanded its research on central bank digital currencies (CBDCs) in a new review posted on its website on Monday.

In a report entitled “Central Bank Digital Currency: A Literature Review,” Fed economists Francesca Carapella and Jean Flemming compiled studies examining the potential impact of a digital dollar on commercial banking and monetary policy. The review provides a theoretical basis for understanding how CBDCs can affect consumer acceptance and financial stability.

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The authors write:

“From a theoretical point of view, the introduction of a digital currency from the central bank (CBDC) raises longstanding questions in connection with the provision of public and private money […] and the central bank’s ability to use CBDC as a means of communicating monetary policy directly to households. “

A literature search is essentially an environmental scan on a specific topic that is used to justify the need for additional research. The Fed report identified the “key features of CBDC” as the main research question to be addressed in the future:

“As with any new literature, many questions remain open. We believe that the most important question is what essential features of CBDC as a means of payment and store of value are important for households’ portfolio selection, which funds to use. “