Abstract
An overview of the definitions of central bank digital currency (CBDC), formulated by researchers of the International Monetary Fund (IMF), the Bank for International Settlements (BIS), the Bank of England, is presented, and the essence of the CBDC is revealed. It is stated that the existing electronic money is a digital form of obligations of financial intermediaries, and CBDC is a form of emission and obligations of central banks. The types and forms of CBDC are generalized, namely: retail or wholesale, account-based or token-based ones. The structure and functionality of the register, payment authentication, access to infrastructure, and governance are defined as factors taken into account during CBDC designing. Similar models of launching national CBDC by the Bank of England (economy-wide access or financial institutions access, and financial institutions plus CBDC backed narrow bank access) and BIS (direct, indirect, hybrid) are under consideration. The synthetic CBDCs are marked as a theoretical concept of CBDC. The overview of projects of the People's Bank of China – "e-renminbi", the Central Bank of the Uruguay – "e-peso", the Central Bank of the Bahamas – "sand dollar" and the Eastern Caribbean Central Bank affirm the interest of developing countries in launching national retail CBDCs. It was found that apart from the Riksbank with the successful "e-krona" project, most of the monetary authorities of developed countries (BIS, Bank of Japan, Bank of Canada, Deutsche Bank, FRS) are just planning or starting to experiment with the issuance of digital securities, which demonstrates their concern about the restructuring of the banking system and the changes of global role of traditional currencies. Among the positive consequences of the introduction of CBDC for the domestic banking system are the emergence of an alternative payment instrument, the implementation of effective monetary policy through increased influence on interest rates, and regulation of the legal regime of crypto currencies. At the same time, the introduction of CBDC involves certain changes in financial intermediation (replacement of the deposits of commercial banks with the CBDC, the performance of functions inherent to commercial banks by the central bank or fintech companies), and will require powerful technical capabilities, including those related to protection from cyber risks. The results of the study point to the need for a cautious approach to the implementation of the Ukrainian CBDC only after the NBU assesses the public demand for new forms of money and the impact of the launch of CBDC models on price and financial stability, and compares available payment technologies that can achieve the same goals as the CBDC.
Highlights
The growing popularity of blockchain technology and decentralized issuance of cryptocurrencies, including bitcoins, have developed the idea of digital currencies of central banks
While central banks in developing countries are actively exploring the issue of CBDCs, regulators in developed countries are more cautious about switching over digital currencies, despite benefits such as improved monetary policy targeting and improved national payment systems
With the growth of digital payments, central banks are responding to the change in the role of traditional money by developing the idea of issuing CBDCs
Summary
The growing popularity of blockchain technology and decentralized issuance of cryptocurrencies, including bitcoins, have developed the idea of digital currencies of central banks. The launch of retail CBDCs will expand the access of non-banking people to financial services through the modernization of the payment system with the use of the cooperation of fintech companies with central banks, in particular via distributed ledger technology (DLT). While central banks in developing countries are actively exploring the issue of CBDCs, regulators in developed countries are more cautious about switching over digital currencies, despite benefits such as improved monetary policy targeting and improved national payment systems This is due to the fact that in some countries the monetary authorities are interested in receiving income from seigniorage, and in others - in maintaining stable exchange rates of their currencies [24]. It is only possible to determine the feasibility and timeliness of the implementation of Ukrainian CBDC by first overcoming the problems that need immediate consideration and identifying the range of available payments technologies that can attain the same goals
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