Earlier this month, the Bank of England issued a working paper, laying out various scenarios of possible financial risks and instability issues of using a CBDC. The report found that in the scenarios described, there was no reason to believe that adopting a CBDC would negatively impact private credit or total liquidity provision to the economy.
Other central banks in Europe have also considered adopting a CBDC. Earlier this month, Norwegian central bank Norges Bank issued a working paper in which they consider developing a CBDC as a supplement to cash to “ensure confidence in money and the monetary system.”
The aforementioned Riksbank is also considering an e-krona as the use of banknotes and coins declines in Sweden.
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