CBDCs could limit bank runs, US paper argues
Digital currency could make policy-makers better able to handle banking panics, say researchers
Well-designed central bank digital currencies (CBDCs) could improve financial stability, says a paper published by the US Office of Financial Research.
Todd Keister and Cyril Monnet’s paper, Central Bank Digital Currency: Stability and Information, argues against the belief a CBDC would create runs on banks and other financial institutions. The authors say their paper is the first research to study how a CBDC would affect the timing of a policy response to a financial crisis.
Keister is a
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