Thinking Fast and Slow about Central Bank Digital Currencies

Ozili, Peterson K (2024): Thinking Fast and Slow about Central Bank Digital Currencies. Forthcoming in:

Abstract

Central banks are considering the issuance of a central bank digital currency to serve as a payment tool to support economic activities. A central bank digital currency can also serve secondary purposes that are related or unrelated to the statutory objectives of a central bank which is monetary and price stability. Many central banks are thinking too fast about central bank digital currencies – they are very optimistic about the potential benefits of central bank digital currencies. While such optimism is good, central banks also need to think slowly about central bank digital currency by paying serious attention to known risks and whether there is a unique use case for CBDC. This calls for cautious optimism and a need for central banks to think fast and slow about central bank digital currencies.

• Item Type: MPRA Paper
• Language: English
• Keywords: CBDC, central bank digital currency, cryptocurrency, digital payment, thinking fast and slow
• Subjects: E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E40 - General; E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E42 - Monetary Systems ; Standards ; Regimes ; Government and the Monetary System ; Payment Systems; E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E49 - Other; 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 > 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

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