DIGITAL MONEY: OPPORTUNITIES AND CHALLENGES

Abstract

Many parallel currencies have always circulated alongside the official currency. Today, a new generation of money is emerging from new technologies: “crypto-currencies”, the best known example of which is bitcoin. Although they constitute a remarkable technological advance, they raise many ethical and economic challenges, which this article tries to shed light on. These assets could eventually become new means of payment, or even units of account, thus reducing the demand for fiat currencies or central bank money. However, crypto-assets are too unstable and risky to really threaten fiat currencies. In this context, a group of leading economists and central bankers wondered whether advances in computing would make central banks obsolete. The digital age means new challenges, but also new opportunities for central banks. The motives for issuing an MDBC would therefore be to provide the public with a dematerialized monetary instrument without liquidity or credit risk that is resilient and easy to access, to curb the growth of crypto-assets and preserve monetary sovereignty. Key words: Digital Currency, Crypto-Currency, Central Bank, Sovereignty, Monetary Policy.