Crypto assets may force central banks into policy synchronisation
Paper examines the impact a global crypto asset would have on the “impossible trinity”
Economists have found a new way in which central banks’ “trilemma” may become a dilemma, as crypto assets harm monetary policy independence.
This could trigger competitive devaluation by central banks and undermine the value of traditional currency, they warn.
At the National Bank of Austria’s digital currency conference in October, Pierpaolo Benigno, Linda Schilling and Harald Uhlig set out their ideas on ‘crypto-enforced monetary policy synchronisation’.
Within their paper, the economists
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