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@inproceedings{54816,
author = {Pirgmann, Michael},
address = {Praha},
booktitle = {Konference doktorandů na Vysoké škole finanční a správní 2022: prezentace výsledků společenskovědního výzkumu s ekonomickými a finančními efekty (9. ročník) = Doctoral Students Conference at the University of Finance and Administration 2022: presentation of the results of social science research with economic and financial effects (9th annual conference)},
keywords = {Monetary Policy; Effective Lower Bound; Cryptocurrencies; CBDC},
howpublished = {tištěná verze "print"},
language = {eng},
location = {Praha},
isbn = {978-80-7408-250-4},
pages = {84-95},
publisher = {Vysoká škola finanční a správní},
title = {Could CBDC be a threat to Monetary Policy?},
url = {https://www.vsfs.cz/prilohy/konference_doktorandu_na_vysoke_skole_fi.pdf},
year = {2022}
}
TY - JOUR
ID - 54816
AU - Pirgmann, Michael
PY - 2022
TI - Could CBDC be a threat to Monetary Policy?
PB - Vysoká škola finanční a správní
CY - Praha
SN - 9788074082504
KW - Monetary Policy
KW - Effective Lower Bound
KW - Cryptocurrencies
KW - CBDC
UR - https://www.vsfs.cz/prilohy/konference_doktorandu_na_vysoke_skole_fi.pdf
N2 - Central Banks are generally exposed to the Effective Lower Bound (ELB) problem when conduction Monetary Policy (MP). It is not possible for a central bank (CB) to perform MP with negative interest rates over a significant period because market participants would convert their deposits into cash if costs for conversion, storage and insurance would be lower than costs for their remunerated deposits. With many CB contemplating Central Bank Digital Currencies (CBDC), this paper discusses the effects for MP under the restriction of the ELB. Under the assumption that the CB will implement a non-remunerated tier for CBDC to provide market participants with a cash like means of payment, it can be assumed that the ELB will increase from currently approximately -1% with only cash in existence, closer to zero when implementing CBDC. This is due to the lower costs of exchange, holdings and insurance when shifting deposits into a non-renumerated tier of CBDC instead of converting into cash in times of negative interest rates. Implementation of a tier of non-remunerated CBDC creates a significant “extra buffer” for market participants with a large destabilizing effect for MP which a CB needs to consider when performing MP at the ELB.
ER -
PIRGMANN, Michael. Could CBDC be a threat to Monetary Policy? In \textit{Konference doktorandů na Vysoké škole finanční a správní 2022: prezentace výsledků společenskovědního výzkumu s ekonomickými a finančními efekty (9. ročník) = Doctoral Students Conference at the University of Finance and Administration 2022: presentation of the results of social science research with economic and financial effects (9th annual conference)}. Praha: Vysoká škola finanční a správní, 2022, p.~84-95. ISBN~978-80-7408-250-4.
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