ECB paper offers tiering solution to CBDC structural concerns
Separating CBDC functions between tiers could disincentivise use during crisis periods
A paper published by the European Central Bank suggests a “two-tiered remuneration” system could solve some of the biggest structural problems associated with issuing a central bank digital currency (CBDC).
Over the past few years, central banks have explored the possibility of issuing digital central bank money. How this asset would behave during a crisis period and whether it would lead to disintermediation within the banking sector emerged as the two key concerns for regulators.
“Central
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