IMF Working Papers Volume 2022 Issue 206: Digital Money and Central Banks Balance Sheet (2022)

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Digital Money and Central Banks Balance Sheet

Author:

Adrian Armas

Adrian Armas
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and

Mr. Manmohan Singh

Mr. Manmohan Singh
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Series:: IMF Working Papers

Volume/Issue:: Volume 2022: Issue 206

Publication Date:: 28 Oct 2022

DOI:: https://doi.org/10.5089/9798400224072.001

ISBN:: 9798400224072

ISSN:: 1018-5941

Pages:: 29

Keywords:: CBDC; digital money; currency-in-circulation; bank deposits; central bank balance sheet; money base (M0); seigniorage; impact of digital money; dollarization level; central bank of Brazil; unit of account; central bank liability; Fiat currency; central bank FX; Digital currencies; Currencies; Central Bank digital currencies; Treasury bills and bonds; Global; Caribbean

Legal-disclaimer:: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Series:: IMF Working Papers

Volume/Issue:: Volume 2022: Issue 206

Language:: English

Publication Date:: 28 Oct 2022

DOI:: https://doi.org/10.5089/9798400224072.001

ISBN:: 9798400224072

ISSN:: 1018-5941

Pages:: 29

Keywords:: CBDC; digital money; currency-in-circulation; bank deposits; central bank balance sheet; money base (M0); seigniorage; impact of digital money; dollarization level; central bank of Brazil; unit of account; central bank liability; Fiat currency; central bank FX; Digital currencies; Currencies; Central Bank digital currencies; Treasury bills and bonds; Global; Caribbean

Legal-disclaimer:: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

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Digital money is a logical step in a process of continuous technological advancement in payment systems. In response, central banks are reviewing their conduct of monetary operations in light of the new shape of financial markets and systems. The impact of digital money will depend on the type of money substitution by digital money. The paper straddles several cases where substitution of CiC (currency in circulation), and bank deposits may take place via digital money such as CBDC or other e-money, and how it would impact the central bank balance sheet. Remuneration of CBDC, if aligned to a new objective, could potentially amplify the effect on the interest rate channel of monetary policy.

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IMF Working Papers

ISSN:: 1018-5941

Publisher:: International Monetary Fund

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