Ozili, Peterson K (2025): How Politics Hinder Central Bank Digital Currency (CBDC) Development and What to Do about It. Forthcoming in:
Preview |
PDF
MPRA_paper_125034.pdf Download (435kB) | Preview |
Abstract
The motivations and benefits of issuing a central bank digital currency (CBDC) are well known but the challenges faced by central banks in developing and issuing a CBDC have received less attention. To fill this gap, this article provides a succinct understanding of how politics hinder CBDC development. It presents the common arguments used by politicians to stifle CBDC development. It also suggests some ways to reduce political resistance towards CBDC development.
Item Type: | MPRA Paper |
---|---|
Original Title: | How Politics Hinder Central Bank Digital Currency (CBDC) Development and What to Do about It |
Language: | English |
Keywords: | CBDC, politics, central bank digital currency, resistance. |
Subjects: | E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E50 - General E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E51 - Money Supply ; Credit ; Money Multipliers E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E52 - Monetary Policy E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E58 - Central Banks and Their Policies E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E59 - Other |
Item ID: | 125034 |
Depositing User: | Dr Peterson K Ozili |
Date Deposited: | 01 Jul 2025 14:46 |
Last Modified: | 01 Jul 2025 14:46 |
References: | Alesina, A. (1987). Macroeconomic policy in a two-party system as a repeated game. The Quarterly journal of economics, 102(3), 651-678. Auer, R., Frost, J., Gambacorta, L., Monnet, C., Rice, T., & Shin, H. S. (2022). Central bank digital currencies: motives, economic implications, and the research frontier. Annual review of economics, 14, 697-721. Bhattacharya, U., Hsu, P. H., Tian, X., & Xu, Y. (2017). What affects innovation more: policy or policy uncertainty?. Journal of Financial and Quantitative Analysis, 52(5), 1869-1901. Bergek, A., Hekkert, M., Jacobsson, S., Markard, J., Sandén, B., & Truffer, B. (2015). Technological innovation systems in contexts: Conceptualizing contextual structures and interaction dynamics. Environmental innovation and societal transitions, 16, 51-64. Bindseil, U. (2020). Tiered CBDC and the financial system. Available at SSRN 3513422. Bjørnskov, C., & Potrafke, N. (2013). The size and scope of government in the US states: does party ideology matter?. International Tax and Public Finance, 20, 687-714. Cecchetti, S. G., & Schoenholtz, K. L. (2023). Central bank digital currency: Is it really worth the risk?. In Data, Digitalization, Decentialized Finance and Central Bank Digital Currencies (pp. 115-122). De Gruyter. Chiu, J., & Davoodalhosseini, S. M. (2023). Central bank digital currency and banking: Macroeconomic benefits of a cash-like design. Management Science, 69(11), 6708-6730. Cioroianu, I., Corbet, S., Larkin, C., & Oxley, L. (2023). Developing central bank digital currencies: a reality check during cryptocurrency euphoria. Economics and Business Letters, 12(2), 105-114. Cukierman, A. (2019). Welfare and political economy aspects of a central bank digital currency. CEPR Discussion Paper No. DP13728. Davoodalhosseini, S. M. (2022). Central bank digital currency and monetary policy. Journal of Economic Dynamics and Control, 142, 104150. Doner, R. F., Hicken, A., & Ritchie, B. K. (2009). Political Challenges of Innovation in the Developing World 1. Review of Policy Research, 26(1‐2), 151-171. Echarte Fernández, M. Á., Náñez Alonso, S. L., Jorge-Vázquez, J., & Reier Forradellas, R. F. (2021). Central banks’ monetary policy in the face of the COVID-19 economic crisis: Monetary stimulus and the emergence of CBDCs. Sustainability, 13(8), 4242. Engert, W., & Fung, B. S. C. (2017). Central bank digital currency: Motivations and implications (No. 2017-16). Bank of Canada Staff Discussion Paper. Foster, K., Blakstad, S., Gazi, S., & Bos, M. (2021). Digital currencies and CBDC impacts on least developed countries (LDCs). The Dialogue on Global Digital Finance Governance Paper Series. Guo, S., Kreitem, J., & Moser, T. (2024). DLT options for CBDC. Journal of Central Banking Theory and Practice, 13(1), 57-88. Gupta, H. (2021). Cryptocurrency to CBDC: the transition of digital currency. FOCUS, 23(4), 53. Ward, O., & Rochemont, S. (2019). Understanding central bank digital currencies (CBDC). Institute and Faculty of Actuaries, 1-52. Hibbs, D. A. (1977). Political parties and macroeconomic policy. American political science review, 71(4), 1467-1487. Kaczmarek, P. (2022). Central bank digital currency: Scenarios of implementation and potential consequences for monetary system. Journal of Central Banking Theory and Practice, 11(3), 137-154. Kumhof, M., & Noone, C. (2021). Central bank digital currencies—Design principles for financial stability. Economic Analysis and Policy, 71, 553-572. Laboure, M., H.‐P. Müller, M., Heinz, G., Singh, S., & Köhling, S. (2021). Cryptocurrencies and CBDC: The route ahead. Global Policy, 12(5), 663-676. Maniff, J. L. (2020). Motives matter: examining potential tension in central bank digital currency designs. Federal Reserve Bank of Kansas City: Omaha, NE, USA. Minwalla, C. (2020). Security of a CBDC (No. 2020-11). Bank of Canada. |
URI: | https://mpra.ub.uni-muenchen.de/id/eprint/125034 |