Skip to main content Accessibility help

We use cookies to distinguish you from other users and to provide you with a better experience on our websites. Close this message to accept cookies or find out how to manage your cookie settings.

Close cookie message
×
Hostname: page-component-586b7cd67f-l7hp2 Total loading time: 0 Render date: 2024-11-29T02:03:13.801Z Has data issue: false hasContentIssue false

7 - Central Bank Digital Currency

Rationales, Design Considerations, and Implementation Using the Algorand Blockchain Technology

from Part III - The Power of Distributed Ledgers in Payments

Published online by Cambridge University Press:  26 October 2023

By
Andrea Civelli ,
Co-Pierre Georg ,
Pietro Grassano  and
Naveed Ihsanullah
Edited by
Sabrina Leo  and
Ida Claudia Panetta
Sabrina Leo
Affiliation:
Sapienza Università di Roma
Ida Claudia Panetta
Affiliation:
Sapienza Università di Roma
Get access

Summary

In this chapter, we talk about three main topics. We first define the issues that a central bank digital currency (CBDC) could address and the reasons to enhance our understanding of CBDCs. Second, we discuss the optimal design principles of a CBDC as they arose from various conversations with central banks, national and supranational authorities, market participants, and academics in various jurisdictions. Finally, we propose a well-rounded and robust solution for a retail CBDC based on Algorand technology which meets these design principles. Most of the content of this chapter is borrowed from the White Paper Issuing Central Bank Digital Currency Using Algorand by Civelli, Georg, Grassano, and Ihsanullah (2022). In that paper, we extensively cover the CBDC design and issuance topics, informed by our recent participation in various pilots, studies, and round-table conversations on these topics.

Keywords

Central Bank Digital CurrenciesDesign PrinciplesBlockchainAlgorandDigital Currencies
Type
Chapter
Information
The Role of Distributed Ledger Technology in Banking
From Theory to Practice
 , pp. 155 - 171
Publisher: Cambridge University Press
Print publication year: 2023

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Bank of International Settlements 2019. ‘Big tech in finance: opportunities and risks. Annual Economic Report’. Available online: www.bis.org/publ/arpdf/ar2019e3.htm.Google Scholar
Civelli, A., Georg, CP., Grassano, P., Ihsanullah, N. 2022. ‘Issuing Central Bank Digital Currencies Using Algorand’. Working Paper. Available online: www.algorand.com/resources/blog/report-issuing-central-bank-digital-currency.Google Scholar
Clark, D. 2018. Designing an Internet. MIT Press.CrossRefGoogle Scholar
Goodhart, C. 1988. The Evolution of Central Banks. MIT Press Books. The MIT Press, edition 1, volume 1, number 0262570734.Google Scholar
Harari, Y. 2011. Sapiens: A Brief History of Humankind. Harper Editions.Google Scholar
Hartung, G., Rutter, K., and Stroemer, G.. 2019. ‘A solution for managing high-quality liquid assets: How distributed ledger technology can benefit the securities lending market’. Journal of Securities Operations and Custody, Vol. 11, No. 4, 282–291.Google Scholar
Hau, H., Hoffmann, P., Langfield, S., Timmer, Y. 2019. ‘Discriminatory Pricing of Over-the-Counter Derivatives’. IMF Working Paper, 19/100.Google Scholar
Kasper, E. 2015. A Definition for Infrastructure – Characteristics and Their Impact on Firms Active in Infrastructure. PhD Thesis, LMU Munich. Available online: www.d-nb.info/1071370057/34.Google Scholar
Newzoo 2019. Global Mobile Market Report – 2019. Available online: www.newzoo.com/insights/trend-reports/newzoo-global-mobile-market-report-2019-light-version.Google Scholar
Paniagua, P. 2017. ‘The institutional rationale of central banking reconsidered’. Constitutional Political Economy, vol. 28, no. 3, 231–256.Google Scholar
Schmiedel, H., Kostova, G., Ruttenberg, W. 2012. ‘The social and private costs of retail payment instruments: A European perspective’. ECB Occasional Paper Series, vol. 137. Available online: www.ecb.europa.eu/pub/pdf/scpops/ecbocp137.pdfGoogle Scholar

Save book to Kindle

To save this book to your Kindle, first ensure [email protected] is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle.

Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

Find out more about the Kindle Personal Document Service.

Available formats
×

Save book to Dropbox

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Dropbox.

Available formats
×

Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

Available formats
×