Template-Type: ReDIF-Article 1.0

Author-Name: Balazs Koczian
Author-Workplace-Name: Magyar Nemzeti Bank
Author-Email: koczianb@mnb.hu


Title: Potential Advantages of Retail Central Bank Digital Currency

Abstract: The emergence of central bank digital currency will cause a radical change in the
relationship between central banks and users. At present, cash is the only way for
users outside the central bank's financial market customer base to hold claims on
the central bank. By comparison, central bank digital currency will provide users
with a safe, versatile and multifunctional instrument, which will be a novelty in
many respects. Central bank digital currency may also provide the option of interest
remuneration, through which the central bank's decisions may reach consumers
directly. As a result of this, the central bank may achieve its goals more efficiently,
and competition may increase in the banking sector. The instrument supports the
penetration of new, innovative solutions and broadens the range of customers in
the banking sector, while the risks inherent in the introduction of the instrument
can be addressed by proper design.

Classification-JEL:  
Keywords: 
Pages: 149-158
Volume: 21
Issue: 3
Year: 2022
File-URL: https://en-hitelintezetiszemle.mnb.hu/letoltes/fer-21-3-fa1-koczian.pdf
File-Format: Application/pdf
Handle: RePEc:mnb:finrev:v:21:y:2022:i:3:p:149-158