BIS highlights risks of Central Bank Digital Currencies – Ledger Insights
- If tokenized, limited supply of CBDC could attract premium
Managing monetary policy using CBDC will be unpredictable
Central banks could have high demand for government securities, bank loans, currencies
On Friday in Dublin, Agustín Carstens General Manager of the Bank for International Settlements (BIS) gave a speech about Central Bank Digital Currencies (CBDC).
- If considering retail CBDCs offered to the public, there are multiple potential differences between cash and CBDCs.
- That, in turn, raises the risk that a CBDC could attract a valuation premium.
- Plus if a central bank holds more money its balance sheet needs to expand by investing in government securities, commercial bank loans and foreign currency reserves.
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