Adoption of a privately-issued digital currency can reduce social welfare, researchers find
Optimal policy can be achieved through central bank digital currency, authors say
An economy with fiat money and a privately issued digital currency, such as bitcoin, used simultaneously can lead to monetary policy co-ordination issues, a team of researchers at the Bank of Canada find.
Consequently, it may be beneficial to have a central bank digital currency in order to achieve the benefits digital currencies have in certain transactions while maintaining control over monetary policy, the researchers conclude.
In the paper, Yu Zhu and Scott Hendry analyse the social
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