The IMF on Central Bank Digital Currency

There are so many interesting thoughts and questions around central banks issuing digital currency (fiat) that it is hard to know where to start. Luckily, we have the wonderfull Laura Shin who collects our thoughts and ask the questions we would like to ask.

In this podcast Laura interviews Dong He, deputy director of the monetary and capital markets department of the IMF, and Yan Liu, Assistant General Counsel at the legal department of the IMF. They talk about central bank digital currencies (CBDCs): the current level of interest among central banks in issuing them, what concerns they need to address when designing them, and how commercial banks might be affected, depending on the design of the CBDC.

One of the most interesting things to contemplate - which came up towards the end of the interview - is the impact 'commodity money' and cryptoassets may have on the ability for central banks to 'manage' the peaks and troughs of global linked economies. For example, there may be a trade between two people where the trade is not settled in currency but instead by $100 worth of tokenised shares in, say, Walt Disney. See further here for a paper by Dong He which considers this aspect the cryptoasset evolution.

I recommend this and indeed all of Laura's podcasts to you, I listen to them the minute they are dropped. If you are new to the space and did nothing more than listen to her past episodes that would be a great way to start building knowledge.

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