How to Issue a Central Bank Digital Currency

Chaum, David; Grothoff, Christian; Moser, Thomas (2021). How to Issue a Central Bank Digital Currency, 3(3/2021). Swiss National Bank

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With the emergence of Bitcoin and recently proposed stablecoins from BigTechs, such as Diem (formerly Libra), central banks face growing competition from private actors offering their own digital alternative to physical cash. We do not address the normative question whether a central bank should issue a central bank digital currency (CBDC) or not. Instead, we contribute to the current research debate by showing how a central bank could do so, if desired. We propose a token-based system without distributed ledger technology and show how earlier-deployed, software-only electronic cash can be improved upon to preserve transaction privacy, meet regulatory requirements in a compelling way, and offer a level of quantum-resistant protection against systemic privacy risk. Neither monetary policy nor financial stability would be materially affected because a CBDC with this design would replicate physical cash rather than bank deposits.

Item Type:	Journal or Series (Working Paper Series)
Division/Institute:	School of Engineering and Computer Science > Institute for Cybersecurity & Engineering (ICE)
Name:	Chaum, David; Grothoff, Christian and Moser, Thomas
Subjects:	H Social Sciences > HB Economic Theory H Social Sciences > HJ Public Finance Q Science > QA Mathematics > QA76 Computer software
ISSN:	1660-7724
Series:	How to Issue a Central Bank Digital Currency
Publisher:	Swiss National Bank
Language:	English
Submitter:	Christian Grothoff
Date Deposited:	17 Mar 2021 13:17
Last Modified:	17 Mar 2021 13:17
Related URLs:	Author
Uncontrolled Keywords:	CBDC, Digital Cash, Blind Signatures, monetary policy
ARBOR DOI:	10.24451/arbor.14465
URI:	https://arbor.bfh.ch/id/eprint/14465