Предпосылки появления и особенности внедрения цифровых валют центральных банков: мировой опыт (обзор постоянно действующего семинара «Цифровые финансы» от 04.03.2021)

Objective: to review a session of the “Digital Finance” permanent seminar at the Institute of Economics of the Russian Academy of Sciences which discussed the prerequisites and consequences of the issue, emission characteristics and circulation of the Central Bank digital currency; to review the discussion of a scientific report “Digital ruble (DR): arguments for and against”. Methods: based on the audio recording, an overview of the discussion at the permanent seminar “Digital Finance” was prepared. Results: the main prerequisites of the digital ruble issue were defined, analyzed through the prism of both the “digital experience” of several Central Banks (of Sweden, China, the Bahamas, the European Union and Russia) and the estimates of the rate of many countries’ transition to the Central Bank digital currency. The issues of the digital ruble issuance and circulation features were considered. The consequences of the digital ruble issuing were analyzed, which consist in changing the roles of Central Bank mandates and intermediary functions of banks, as well as in the transformation of global challenges directly related to the issuance of the Central Banks digital currency.Scientific novelty: the survey shows that the Central Bank digital currency is the third form of Central Bank money, which all the countries and their regulators need to learn to live and work with in new ways. It is stated that digital currency is not the only digital token (digital currency, or programmable code), but also an account (a current account in the form of a deposit). It is shown that the digital ruble can act as a financial asset and a financial tool, bringing a certain percentage (including negative). The components are listed that determine the future design of the digital ruble, directly related to the Central Bank technological platforms. It is explained why the digital ruble introduction would transform the existing Central Bank mandates, the activities of financial market entities, and the regulation methods of monetary authorities.Practical significance: the main provisions and conclusions of the review can be used by the Bank of Russia in designing the digital ruble, as well as the concept and platform of the Central Bank digital currency.

Received 28.07.2020. The article examines issues related to the introduction of central bank digital currencies (CBDC) for retail payments and wholesale settlements. The study defines and classifies central bank digital currencies, researches the main models of CBDC systems. The article also analyzes the features of various national projects for issuing Central bank digital currencies. The paper uses methods of economic-statistical and functional-structural analysis. The study concludes that CBDC are a new form of central bank money. Digital currencies can be issued in various issuing systems for the purpose of retail payments or wholesale settlements. Among the models of CBDC systems for retail payments (R-CBDC) the direct system model is the most attractive for its simplicity. This model eliminates the dependence of the Central bank on any financial and payment intermediaries. Models of synthetic and hybrid R-CBDC systems are characterized by reliability and speed in processing multiple transactions which makes them the most promising for implementation. Among the models of CBDC systems for wholesale payments (W-CBDC) the model of the system with a universal digital currency (U-W-CBDC) may be the most suitable for eliminating the main disadvantages of modern cross-border payment systems. However, a large number of technological and financial changes as well as the high operating costs of the U-W-CBDC can make such systems difficult to implement for non-developed financial market infrastructure countries. National financial regulators have different motivations for issuing digital currencies. The main advantages of digital currencies for retail payments may consist in providing users with highly liquid, low-risk, universally available means of payment. The main advantages of wholesale digital currencies are that they offer faster, safer, cheaper cross-border payments. The most advanced projects for issuing R-CBDC can be considered DCEP (People’s Bank of China) E-krona (Central Bank of Sweden). The most successful pilot projects for issuing W-CBDC are the projects Jasper (Central Bank of Canada) and Ubin (Monetary Authority of Singapore), which were able to achieve interoperability in conducting cross-border payments. Currently most CBDC are retail based on the use of distributed ledger technology and implemented in the form of DLT-tokens. Countries that develop digital currency systems can be divided into three groups. The first group is countries where the introduction of CBDC can be designed to support the national demand for central bank money (Sweden, Norway, Singapore, etc.). The second group – countries for which the adoption of digital currencies can afford to keep the place of national currencies in international settlements (USA and EU) or expanding the use of national currencies at the international level (China). The third group represents countries for which the introduction of digital currencies may be associated with the control of national monetary circulation and de-dollarization of the financial system (Uruguay, South Africa, Cambodia, etc.).

The subject of research, relevance. The development of digital technologies has an impact on almost all areas of society, including the financial sphere. This is the reason for a serious controversy to develop recently and to continue both at the international and national levels in terms of approaches to their legal regulation. This discussion affects both public law and private law. The emergence of such a phenomenon as digital currencies raises the question of their legalization for legislators of various states. The answer to such a question cannot be found without studying the legal consequences of making such a decision for both individuals and the financial system of the state. The purpose. The article puts forward and substantiates a hypothesis that the choice of legal methods for regulating virtual assets is a matter of legal policy, and not just matter of research in the field of defining virtual assets as objects of law or type of property. As a result, when choosing methods of legal regulation of virtual (digital) assets, not only the impact of these legal entities on legal economic turnover (including such issues as the possibility of using excess generated electricity or taxation issues) should be assessed, but also the risk of stimulating illegal "economic" turnover (turnover of things and services in the Darknet, limited turnover of things, for example, drugs), as well as the impact on the financial system. The methodological basis. Various scientific methods of cognition were used to write the article, including system-structural, formal-logical, comparative-legal and dialectical. The research is based on the principles of interdependence and interconnectedness of social processes. The main results, scope of application. The article examines the main approaches to the regulation of digital currencies, studies the phenomenon of digital currency itself, assesses the circumstances that aroused massive interest and enthusiasm for cryptocurrencies. An analysis of current positive legal material is presented, in particular, the approach to the regulation of digital currency contained in the Russian Federal Law of July 31, 2020 No. 259- FZ "On digital financial assets, digital currency and on amendments to certain legislative acts of the Russian Federation". The main differences between digital currencies and such a legal phenomenon as digital rights (including utilitarian digital rights and digital financial assets) are noted. It is noted that in most Russian scientific works in the field of law devoted to digital currencies, attention is paid to the definition of digital currency as an object of civil rights, the foreign experience of attempts of legal regulation of cryptocurrency is considered, emphasis is placed on the positive aspects of the legalization of cryptocurrency for individuals, the risks of legalization of cryptocurrency for individuals, as well as the tasks of regulators in the digital economy are investigated. In addition, some scientific works are devoted to issues related to the digitalization of the economy and digital security. However, little attention is paid to the consequences of the legalization of digital currencies for the monetary system of the state and the potential risks for the stability of monetary systems. Conclusions. Interest in digital currencies may decrease in following situations. Firstly, if the services provided by payment systems are more efficient, reliable, affordable and cheap for the consumer. Secondly, during the implementation of the central bank digital currency project (in Russian case - the digital ruble), since digital currencies issued by central banks have the advantages of private digital currencies, but are devoid of their disadvantages.

The subject of research, relevance. The development of digital technologies has an impact on almost all areas of society, including the financial sphere. This is the reason for a serious controversy to develop recently and to continue both at the international and national levels in terms of approaches to their legal regulation. This discussion affects both public law and private law. The emergence of such a phenomenon as digital currencies raises the question of their legalization for legislators of various states. The answer to such a question cannot be found without studying the legal consequences of making such a decision for both individuals and the financial system of the state. The purpose. The article puts forward and substantiates a hypothesis that the choice of legal methods for regulating virtual assets is a matter of legal policy, and not just matter of research in the field of defining virtual assets as objects of law or type of property. As a result, when choosing methods of legal regulation of virtual (digital) assets, not only the impact of these legal entities on legal turnover (including such issues as the possibility of using excess generated electricity or taxation issues) should be assessed, but also the risk of stimulating illegal economic turnover (turnover of things and services in the Darknet, limited turnover of things, for example, drugs), as well as the impact on the financial system. The methodological basis. Various scientific methods of cognition were used to write the article, including system-structural, formal-logical, comparative-legal and dialectical. The research is based on the principles of interdependence and interconnectedness of social processes. The main results, scope of application. The article examines the main approaches to the regulation of digital currencies, studies the phenomenon of digital currency itself, assesses the circumstances that aroused massive interest and enthusiasm for cryptocurrencies. An analysis of current positive legal material is presented, in particular, the approach to the regulation of digital currency contained in the Russian Federal Law of July 31, 2020 No. 259- FZ On digital financial assets, digital currency and on amendments to certain legislative acts of the Russian Federation. The main differences between digital currencies and such a legal phenomenon as digital rights (including utilitarian digital rights and digital financial assets) are noted. It is noted that in most Russian scientific works in the field of law devoted to digital currencies, attention is paid to the definition of digital currency as an object of civil rights, the foreign experience of attempts of legal regulation of cryptocurrency is considered, emphasis is placed on the positive aspects of the legalization of cryptocurrency for individuals, the risks of legalization of cryptocurrency for individuals, as well as the tasks of regulators in the digital economy are investigated. In addition, some scientific works are devoted to issues related to the digitalization of the economy and digital security. However, little attention is paid to the consequences of the legalization of digital currencies for the monetary system of the state and the potential risks for the stability of monetary systems. Conclusions. Interest in digital currencies may decrease in following situations. Firstly, if the services provided by payment systems are more efficient, reliable, affordable and cheap for the consumer. Secondly, during the implementation of the central bank digital currency project (in Russian case - the digital ruble), since digital currencies issued by central banks have the advantages of private digital currencies, but are devoid of their disadvantages.

Objective: to determine the advantages and features of the development of centralized digital currencies and the prospects for their development globally.Methods: historical method, abstract-logical method.Results: the development of technologies and infrastructure and the experience in the use of public digital currencies have led to the logical interest of most central banks in issuing a new form of money - digital currencies of central banks. The main types of design of central banks digital currencies are considered, as well as the requirements for digital fiat currencies. Some examples of countries that have conducted test implementation and experiments with CBDC are presented. It is determined that we are beginning to move from cash to digital fiat currencies and the next step will be the transition to fully digital forms of money, which can lead to many potential consequences for the banking and monetary systems.Scientific novelty: the article shows that the development of technologies, including payment technologies, anti-crisis measures of governments and central banks, and, as a result, the increase in the money supply led to a surge in the interest of central banks to issue their own digital currencies. It is shown that a single position on the properties and design of digital fiat currencies has not yet been developed. It is stated that the transition to CBDC will definitely lead to a change in monetary policy and to the financial sector nationalization.Practical significance: the analysis of the methodology for determining the properties and design of digital currencies of central banks, presented in the article, will be useful for developing an approach to the implementation of digital national currencies. The presented data on the development of digital currencies concepts allows identifying the connections and patterns of the development and emergence of a new digital form of money.

The scant legislative definition of the phenomenon of virtual currencies, the lack of established business circulation and, consequently, the scattered judicial practice, all point to the complexity of understanding the legal status of electronic digital media - digital currency. Since distributed ledger technology is still in its infancy, digital currency users, miners, cryptocurrency exchange owners, tax regulators and policymakers face a number of unresolved issues at the national and international level. It is unlikely that any major economy today would support a cryptocurrency such as bitcoin, which cannot be controlled by a central bank and was created by a secretive cryptographer. Nevertheless, we believe that central banks around the world will launch their own digital currencies, combining the advantages of cryptocurrencies and traditional money. For the future: despite the legislative basis for the fixation of digital currency in Russia, we believe that the further free use and use in civil circulation of cryptocurrency is questionable. Introduction in the near future by the Central Bank of Russia of such a category of object or a type of non-cash money as "digital ruble" practically excludes the free circulation of digital currency. Presumably, that (central bank digital currency, CBDC) or digital ruble will work on the principle of optional means of payment, combining the properties of cash and non-cash funds and subject to issuance by the Bank of Russia in a digital format. The issues related to the legal status of digital rubles today are open and are in the plane of not only civil law, but also constitutional law. The analysis of crypto-exchanges around the world presented in this article reveals one trend - these activities are subject to licensing. For the full development of global financial activities, including the cryptoindustry, the development of competent business legislation on the organizers of trade turnover - crypto-exchanges - with the establishment of general principles of their activities, with the definition of the criteria of these subjects, as well as the content of their actual activities is necessary. To regulate such an institution, a specialized type of licensing is needed, by analogy with fiat money activities, based on the progressive experience of such states as Malta, Estonia, the USA, Canada, Latin America, Switzerland, Japan, etc... Such licensing could be tiered, depending on the volume of cryptocurrency transactions. The creation of strict standardization for any trade, exchange transactions with digital currency would allow Russia to be a full participant in global business. Finally, improving the legal literacy of Russians when participating in exchange activities will raise the status of investment, allow the population to avoid financial risky operations, which will ultimately contribute to the stabilization of the economic situation in the country. The author declares no conflicts of interests.

The article is devoted to the study of prospects for digital currency issue by central banks as a new form of central bank money and to the potential of their influence on monetary and credit system. The aim of the article is to interpret and classify central bank digital currencies, to identify key characteristics of digital currencies and possible models of their issue, as well as to define the main directions of influence of digital currencies on the monetary and credit and payment systems. The scientific novelty of the article is in the systematization and comparison of different ideas about the implementation of sovereign digital currencies considering the use of distributed registry technologies. The study analyzed the projects of central banks on the issue of digital currencies and identified their features. Possible directions of influence of central bank digital currencies on the monetary and credit policy of the Central Bank and the activities of credit institutions were determined. It revealed that central bank digital currencies can be considered as a new form of money of the Central Bank, which can be issued to be used both in retail and in wholesale payments. Digital currencies may differ in some characteristics. The key ones are: a way to integrate into the monetary and credit system; emission technology; currency storage method; mechanism of mutual settlements and anonymity level. The study showed that the main incentives for introducing digital currencies are the possibility to provide an alternative and universally accessible legal means of payment, as well as to provide faster, more transparent and cheaper in-country and cross-border payments. The influence of digital currencies on the monetary and credit system and the monetary and credit policy of the Central Bank will largely depend on the scenario of their system integration. If cash is simply replaced in circulation by digital currencies, the effect on the Central Bank monetary and credit system and policy will not be significant. However, if central bank digital currencies are issued as an addition to cash, or are in parallel circulation, they can strengthen the transmission mechanism of the monetary and credit policy and increase the centralization of assets on the Central Bank balance sheet, as well as reduce the funding provided by credit institutions.

This publication is devoted to the study of a new financial and legal instrument central bank digital currencies (CBDC) that is had distributed worldwide. Fiat digital currencies are being issued already in some countries, in others the issue of their introduction is under discussion only. Based on the method of comparative law and other methods of scientific research, the author opens out the common legal features of digital currencies of various countries and their differences as well. The foreign experience made it possible for author to generate the advantages and disadvantages of the digital currencies of central banks. Among the first, the simplification of cashless payments, the reduction in the costs of making money transfers, transparency for central banks and financial supervisory authorities of operations with digital currency, an increase the level of security and safety of funds, etc. Disadvantages CBDC are the distrust of citizens in digital currencies, the inability to solve the problem of weakness and instability national currency with the help of a new digital tool, the enormous costs of the Central Bank of the Russian Federation, credit institutions of creating this system, developing special programs for clients integrated with the digital platform, the possibility of leakage of personal information, as well as full openness of information about users. The Russian practice of introducing the digital ruble has not been left without attention. The publication also touches upon some legal problems of this subject and proposes their solutions. The author, in addition to general scientific methods, primarily uses such special methods of scientific knowledge as the formal legal method, the method of comparative law, empirical methods such as collecting of the data on the distribution of digital currencies of the central banks of the world, comparative analysis of legal documents, observation.

В условиях стремительного внедрения цифровых инноваций в финансовый сектор формируются объективные основы для дальнейшего развития платежной инфраструктуры на базе цифровой национальной валюты. В современных условиях практически все развитые страны активно внедряют проекты цифровых валют, ориентируясь на обеспечение инновационности и эффективности платежной системы в интересах всех хозяйствующих субъектов: государства, бизнеса и населения. В предлагаемой статье исследованы объективные основы внедрения национальных цифровых валют, приведена характеристика факторов, влияющих на принятие решения о выпуске цифровых валют денежными властями, отмечены результаты реализации проекта цифровых валют в разных странах, проанализирован ход реализации пилотного проекта по внедрению цифрового рубля Банком России, выделены наиболее уязвимые зоны при реализации проекта цифровых валют. Показано, что процесс перехода к цифровым валютам носит необратимый характер, активность стран по их внедрению обусловлена не только экономическими причинами, но и политическими выгодами. Целью статьи является исследование процесса построения и внедрения дизайна цифровых валют. Задачами исследования являются: анализ объективных основ внедрения цифровых валют, характеристика факторов, влияющих на принятие решения денежными властями о выпуске цифровых валют, оценка результатов реализации денежными регуляторами проектов цифровых валют, хода реализации проекта по внедрению цифрового рубля в России, определение уязвимых зон при реализации проекта цифровых валют. Методологическую основу исследования составили системный подход и такие общенаучные методы познания, как научная абстракция, сочетание исторического и логического, анализ и синтез, метод сравнения и сопоставления. Полученные результаты могут послужить предпосылкой для дальнейших исследований по вопросам обеспечения эффективности проектов, связанных с внедрением цифровых валют. In the context of the rapid introduction of digital innovations in the financial sector, an objective basis is being formed for the further development of the payment infrastructure based on the digital national currency. In modern conditions, almost all developed countries are actively implementing digital currency projects, focusing on ensuring the innovation and efficiency of the payment system in the interests of all economic entities: the state, business and the population. This article explores the objective foundations for the introduction of national digital currencies, describes the factors influencing the decision to issue digital currencies by the monetary authorities, notes the results of the implementation of the digital currency project in different countries, analyzes the implementation of the pilot project for the introduction of the digital ruble by the Bank of Russia, highlights the most vulnerable areas in the implementation of the digital currency project. It is shown that the process of transition to digital currencies is irreversible, the activity of countries in their implementation is due not only to economic reasons, but also to political benefits. The purpose of the article is to study the process of building and implementing the design of digital currencies. The objectives of the study are: analysis of the objective foundations for the introduction of digital currencies, characterization of the factors influencing the decision of the monetary authorities to issue digital currencies, assessment of the results of the implementation of digital currency projects by monetary regulators, progress in the implementation of the project to introduce the digital ruble in Russia, identification of vulnerable areas in the implementation of the project digital currencies. The methodological basis of the study was a systematic approach and such general scientific methods of cognition as scientific abstraction, a combination of historical and logical, analysis and synthesis, the method of comparison and comparison. The results obtained can serve as a prerequisite for further research on ensuring the effectiveness of projects related to the introduction of digital currencies.

In this paper, we highlight the prospects that open up to the global economy due to the advent of central bank digital currencies (CBDCs). The introduction of such digital cur-rencies represents revolutionary opportunities for reformatting the financial space, improving settlement mechanisms and widespread access to banking services. The presentation begins with an understanding of the growing interest of central banks in creating their own digital cur-rencies. We discuss how CBDCs can increase operational efficiency and reduce transaction costs, while increasing access to financial services for different segments of the population. Continuing the analysis, we pay attention to the strategic impact of CBDCs on macroeconomic policy and financial stability. For example, it examines how innovations can optimize liquidity management, speed up international payments, and improve the transparency of financial transactions. Then we move on to explore the possible transformations in the banking industry caused by the advent of CBDCs. The conversation is about a potential role reversal between commercial and central banks, changes in lending, as well as in the deposit system. We do not ignore the risks associated with the implementation of digital currency projects. The detailed analysis co-vers possible cybersecurity threats, issues related to the protection of private information, and risks to the stability of the financial market. In conclusion, the article highlights the importance of adequate regulatory policies and oversight mechanisms for the safe integration of CBDCs into the economy. The importance of global cooperation in creating a compatible international network of digital currencies, which is key to maintaining global economic stability, is emphasized.

The article discusses the advantages and possible disadvantages of CBDC (Central Bank Digital Currencies). This issue gained special relevance after the global financial crisis of 2008-2009. It is no exaggeration to say that in recent years the entire world has been swept up in the fever of creating Central Bank Digital Currency (CBDC). More than a hundred central banks are engaged in this topic. Central banks of the People's Republic of China, India, Sweden, Kazakhstan, the Russian Federation and some other countries can be considered the most advanced in this matter. In about a dozen countries, the authorities have already announced the introduction of digital currency. But it's mostly the smaller jurisdictions that experts say are being used as testing grounds. The Bank for International Settlements (BIS) has studied the issue of CBDC in depth. It provides advisory assistance to individual countries' central banks in the preparation of digital currency projects and also initiates projects to connect individual countries' digital currency systems to use CBDC as a means of payment between countries. Some experts suggest that the BIS has far-reaching goals to create a single CBDC for all countries - a global digital currency that should replace the US dollar (Heller, 2021). As for the International Monetary Fund (IMF), until recently the topic of CBDC was of peripheral interest to it. However, by 2023, the IMF's interest has shifted towards digital currency. In April of this year, the annual spring session of the governing bodies of the International Monetary Fund and the World Bank (WB) was held in Washington, where there were a number of speeches on the topic of CBDC. Keywords: digital currency, cryptocurrency, bitcoin, central bank digital currency, commercial banks, central banks.

The emergence of Central Bank Digital Currencies (CBDCs) reflects the evolving role of central banks in digital finance. Among the most advanced initiatives, China’s digital yuan (e-CNY) and the European Central Bank’s Digital Euro represent contrasting approaches to CBDC design, regulation, and monetary policy. While the e-CNY prioritizes state control, financial sovereignty, and cross-border expansion, the proposed Digital Euro emphasizes privacy, financial stability, and regulatory compliance. This paper critically examines these two initiatives across four key dimensions: technological infrastructure, legal and regulatory frameworks, economic and monetary implications, and security/privacy/ethical considerations. Using a comparative qualitative approach, the paper synthesizes insights from central bank reports, policy research, and academic literature, assessing the trade-offs and challenges each CBDC faces. Findings show that the e-CNY can enhance monetary policy efficiency and adoption yet raises concerns over financial surveillance and capital control risks. The Digital Euro, by contrast, aims to preserve banking sector stability and user privacy, while facing hurdles in regulatory fragmentation and adoption scalability. The paper contributes to the current CBDC discourse by offering a structured comparison, highlighting policy lessons for central banks navigating digital currency implementation, while underscoring the need for harmonized global regulatory standards, balanced tradeoffs between privacy and oversight, and the strategic role CBDCs can have for more efficient monetary policy, financial stability and inclusion.

The rapid development and adoption of digital currencies are driving significant changes in the global financial system, with profound implications for national security and global power dynamics. State-backed digital currencies, such as Central Bank Digital Currencies (CBDCs), offer new opportunities and risks in terms of sovereignty, financial control, and data security. Countries may use digital currencies to reduce reliance on the U.S. dollar, potentially challenging its global dominance and weakening American geopolitical influence. At the same time, digital currencies raise concerns about money laundering, terrorism financing, and the ability of governments to monitor illicit financial flows, making them a critical issue for national and international security frameworks. Moreover, the use of digital currencies in cross-border transactions could allow countries to bypass traditional financial systems like SWIFT, reducing the effectiveness of economic sanctions as a tool of foreign policy. This is particularly relevant as nations such as China and Russia explore digital alternatives to protect their economies from Western financial pressure. The strategic implementation of CBDCs can also enhance state control over domestic economies, enabling real-time monitoring and regulation of financial activity, which can be both a strength and a potential threat to individual privacy and democratic norms. On a broader scale, the rise of digital currencies may lead to the emergence of new financial alliances and blocs, reshaping global economic hierarchies. Technological leadership in digital finance could become a key aspect of geopolitical competition, with countries investing heavily in blockchain infrastructure, cybersecurity, and digital payment ecosystems. Ultimately, digital currencies are not just financial instruments but tools of influence, control, and power projection in the evolving international order

The aim of the article is to study the impact of digital currencies of central banks on the international financial system in modern conditions. The article defines that the central bank digital currency (CBDC) is an electronic form of the national currency, which is created and controlled by the central bank and is implemented in various formats, including retail and wholesale options, as well as on the basis of accounts or tokens, using digital ledgers, with the possible application of technologies such as blockchain. CBDC is a central bank commitment and can be used to make payments, store value, and other financial transactions, while enabling fast, secure, and cost-effective transactions for consumers and businesses. The main directions of influence of digital currencies of central banks on the international financial system are considered and defined. A study of the advantages and disadvantages of the CBDC issue has been carried out. It is emphasized that digital currencies have a significant number of advantages and a significant impact on global financial markets due to their unique properties, despite a number of risks they entail. Based on this, the most popular private digital currencies in 2024 and their direct impact on the international financial system are determined. Their market capitalization is also determined. Based on this, it is emphasized that private digital currencies play a significant role in the development of the global financial system, stimulating innovation and increasing the efficiency and accessibility of financial services. Exactly these currencies have become the main driving force for the creation of central bank digital currencies. The authors consider digital currencies of central banks of different countries, characterizing the most popular ones in 2024. Thus, the market share of these currencies is determined, which shows how the major economies of the world are actively developing their digital currencies to maintain economic stability and strengthen their position in the global financial system. It is emphasized that Ukraine also continues to work on the launch of its central bank digital currency – the e-hryvnia. A number of challenges and prospects posed by the introduction of central bank digital currencies for the international financial system are identified.

This chapter collects the slides from Prof. Andrew Rose (U C Berkeley and Dean NUS Business School since 2019) who commented on Prof. Engels’ “The Implications of Digital Currencies for Monetary Policy and the International Monetary System” (see Chapter 7).Prof. Andrew Rose agreed with the main conclusion that private sector digital currencies would have little immediate effect on monetary policy or the international monetary system. However, the potential of digital currency to increase capital mobility over time may make the choice between fixed exchange rate and monetary sovereignty sharper. Digital currencies may facilitate the loosening of capital controls. Prof. Rose commented that private digital currencies, even in aggregate, are fairly small: the total stock of them is less than 2% of worldwide currency and less than 4% of daily foreign exchange transactions. Because of their inherent volatility, private digital currencies do not meet the requirements of being money: a medium of exchange, unit of account and store of value. Private digital currencies cannot discipline the central bank’s monopoly on money supply. More fundamentally, it is not clear if private (decentralized) digital currencies can be algorithmically designed to stabilize prices, counter business cycles and serve as a lender of last resort, all of which are currently functions residing with the monetary authority.Prof. Rose argued that a central bank digital currency can indeed give a monetary authority the flexibility to offer negative interest rates. A central bank, however, needs to safeguard against hacking and create its own ‘know your client’ (KYC) protocols and risks substituting practices for commercial banks’ deposits. He further pointed out that with or without a central bank digital currency, the monetary authority’s policy assignment remains: a society gives its central bank power and independence in return for price and financial stability.