An economist from the Reserve Bank of New Zealand finds there are no financial stability benefits when issuing a central bank digital currency.
In the latest of a series of research, Amber Wadsworth evaluates the pros and cons of issuing a CBDC. For financial stability, key concerns are an increase in operational costs, the risk of bank runs and a reduction in the resilience of the sector.
“A central bank-issued currency introduces some costs to financial stability,” Wadsworth says. Banks