CBDC is mixed bag for financial stability – Bank of Korea
Central bank paper highlights stability concerns but adds some positives
A paper published by the Bank of Korea is “among the first” to analyse the impact a central bank digital currency would have on financial stability, the authors say.
The conclusions of the paper, written by Young Sik Kim and Ohik Kwon, are somewhat mixed. In line with some earlier research, the authors find the introduction of deposits in CBDC accounts at the central bank would cut the supply of private credit by commercial banks, raising nominal interest rates and lowering a commercial bank’s
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