INTERNATIONAL JOURNAL OF NOVEL RESEARCH AND DEVELOPMENT International Peer Reviewed & Refereed Journals, Open Access Journal ISSN Approved Journal No: 2456-4184 | Impact factor: 8.76 | ESTD Year: 2016
Scholarly open access journals, Peer-reviewed, and Refereed Journals, Impact factor 8.76 (Calculate by google scholar and Semantic Scholar | AI-Powered Research Tool) , Multidisciplinary, Monthly, Indexing in all major database & Metadata, Citation Generator, Digital Object Identifier(DOI)
The goal of competing against and replacing central bank fiat money and the banking system, digital currency developed by the private sector, like bitcoin, is intended to have a fixed supply and enable payments. Banks are innovating in response to central banks creating fiat central bank digital currency (CBDC). In order to prevent the disintermediation of banks, encourage optimal firm investment and risk sharing for consumers, and stop digital currency runs into CBDC, this paper demonstrates that central bank monetary policy interest rates paid on bank reserves must be set dynamically and relative to interest rates (even if zero rates) paid on CBDC. In nations with rapid inflation, private digital currency might be preferred to fiat money, although doing so decreases investment and risk sharing. In order to boost investment and risk-sharing and prevent fiat inflation, banks can remerge by accepting deposits and making loans in private digital currency. However, these banks run the risk of experiencing runs into the private digital currency. For investment, risk-sharing, and financial stability, private digital currency is better to conventional hard currencies, such as those based on a gold standard.
Keywords:
Digital currency, Fiat currency, Financial stability.
Cite Article:
"Central Bank Digital Currency", International Journal of Novel Research and Development (www.ijnrd.org), ISSN:2456-4184, Vol.9, Issue 2, page no.a363-a373, February-2024, Available :http://www.ijnrd.org/papers/IJNRD2402039.pdf
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ISSN:
2456-4184 | IMPACT FACTOR: 8.76 Calculated By Google Scholar| ESTD YEAR: 2016
An International Scholarly Open Access Journal, Peer-Reviewed, Refereed Journal Impact Factor 8.76 Calculate by Google Scholar and Semantic Scholar | AI-Powered Research Tool, Multidisciplinary, Monthly, Multilanguage Journal Indexing in All Major Database & Metadata, Citation Generator
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