CENTRAL BANK DIGITAL CURRENCY

Transcription

1 CENTRAL BANK DIGITAL CURRENCY DR. HANS KUHN CFA SOCIETY SWITZERLAND GENEVA, 13 SEPTEMBER 2017 INTRODUCTION 2 1

2 OVERVIEW What is Central Bank Digital Currency? Possible use cases Settlement coin Cash substitute New monetary policy instrument Universal access to central money Why should central s introduce CBDC? Open issues and future research Conclusions 3 WHAT IS CBDC? Access to central money today limited to s and payment service providers Issue (as tokens, coins) and transfer on the blockchain widely available DLT-based representation of fiat money IMF (2017) value based vs. account based like (i) notes and (ii) central reserves 4 2

3 WHAT IS CBDC? physical electronic Private money Tokens & Notes Reka Cash State-backed money (denominated in a sovereign currency) Coins Banknotes Central money Central reserves SNB sight accounts CBDC Commercial money deposits e-money Private money Centralized issuer WIR M-Pesa Decentralized no issuer Virtual Currencies Bitcoin Ether 5 WHAT IS CBDC? physical electronic Private money State-backed money (denominated in a sovereign currency) Private money Tokens & Notes Cash Central money Central reserves CBDC Commercial money e-money Central issuer Decentralized asset p2p Universal Anonym Payment systems p2p Universal Pseudonym Payment systems Corresp. s p2p Anonym Account based p2p Universal Pseudonym exchange mechanism 6 3

4 USE CASES Description Access Pseudonymity Interests A Inter settlement coin R No No B Cash substitute UR Yes No C New monetary policy tool UR Yes Yes D Public deposits in CB UR No (Yes) BBVA Research, CBDC: assessing implementation possibilities and impacts (March 2017) 7 USE CASE A: SETTLEMENT COIN Description Settlement currency for payment and securities settlement systems Restricted (permissioned) DLT network Issuance of CBDC by central ; transfer to wallets of participants in exchange to central reserves Impact Most likely scenario with limited impact Efficiency (24/7; liquidity management) Resilience and reliability Lower access barriers - integration of non service providers More competition 8 4

5 USE CASE B: CASH SUBSTITUTE Description CBDC as a substitute to cash (notes and coins) Attributes universality pseudonymity P2P no interests Impact End users: Access to blockchain economy Faster, cheaper payments Financial inclusion Banks: Payment services Deposits New service providers; increased competition 9 USE CASE C: NEW MOPO TOOL Description CBDC as a new monetary policy tool Interest bearing Positive interests expansion of monetary base Negative interests no zero lower bound Indexed to general price level (stable real value) Impact Expansion of CB MoPo toolkit Unlimited financial repression End of cash Bordo/Levin, Central Bank Digital Currency and the Future of Monetary Policy Hoover Institution Working Paper (August 2017) Negative impact on deposit base 10 5

6 USE CASE D: UNIVERSAL CENTRAL BANK MONEY Description Universal access to central money (unrestricted) CBDC as a store of value Impact safer store of value (no credit risk) partial narrow ing system most disruptive scenario requires new CB mandate/policy 11 USE CASES Why should central s introduce CBDC? IMF (2017) 12 6

7 OPEN ISSUES & FUTURE RESEARCH Scalability, resilience, integrity Basic design Control by central (= trusted third party) Access Privacy/transparency Future of cash Competition among currencies Legal framework/setting Central mandate Property/insolvency law (incl. finality) 13 CONCLUSIONS Issuance of central money in a distributed ledger environment actively explored by central s Different use cases considered, with universal central money as most disruptive scenario Lower entry barriers for new service providers; increased competition Narrower ing system in scenarios with universal access No technicality - topic of general interest 14 7

8 November 3, 2017 Zurich 15 DR. HANS KUHN, LL.M. ATTORNEY-AT-LAW Zulauf Partners Wiesenstr. 17 CH-8032 Zurich University of Lucerne School of Law Frohburgstr Lucerne hans.kuhn@doz.unilu.ch 16 8

9 ANNEX: REPORTS, PAPERS & SPEECHES ECB, Virtual currency schemes (October 2012) Swiss Federal Council, Bericht des Bundesrates zu virtuellen Währungen in Beantwortung der Postulate Schwaab ( ) und Weibel ( ) (25 June 2014) EBA, Opinion on virtual currencies, EBA/Op/2014/08 (4 July 2014) ECB, Virtual currency schemes a further analysis (February 2015) FATF, Guidance for a risk-based approach - Virtual Currencies (June 2015) CPMI, Digital Currencies (November 2015) Dong He et al., Virtual Currencies and Beyond: Initial Considerations, IMF Staff Discussion Note (January 2016) Broadbent, Central s and digital currency (London, 2 March 2016) Thiele, Industry Dialogue on Distributed ledger technology potential benefits and risks (Wiesbaden, 26 January 2017) Mersch, Digital Base Money: an assessment from the ECB s perspective (Helsinki, 16 January 2017) IMF, Fintech and Financial Services: Initial Considerations, IMF Staff Discussion Note SDN/17/05 (June 2017) ECB/BoJ, Project Stella: Payment systems: liquidity saving mechanisms in a distributed ledger environment (September 2017) 17 9