Abstract
The emergence of crypto-currencies has spurred a debate on whether central banks should themselves issue currencies in a digitised form. We investigate the technology options available for such implementations today and analyse potential drivers and inhibitors for the successful implementation of a central bank digital currency (CBDC). We conclude that issuing fiat currency as centrally issued digital certificates (CIDC) is the most likely path to success for CBDC. Digital certificates are the most similar technology to issuing physical cash, and they can be secure. CIDC allow for flexible delivery approaches, where the existing economic agents can continue their existing roles. At the same time, it gives the central bank significant additional benefits. These include improved control mechanisms for its outstanding currency, more direct influence and visibility of the circulation of its currency, and improved settlement mechanisms for those dealing in their currencies.
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