Cost of carry and Digital public money: Difference between pages

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Cost of carry means the total net costs of holding an investment asset or market position.
''Economics - money supply - central banks - public money - digital currency.''


Cost of carry includes financing costs.
The part of the money supply comprising any digital liabilities of the central bank.


For example, any central bank digital currency (CBDC).


For physical assets, cost of carry may include storage and insurance costs.


Cost of carry is usually calculated and stated after offsetting any income generated by the asset.
:<span style="color:#4B0082">'''''CBDC should anchor monetary stability & complement private sector activities'''''</span>


:"In a recent presentation by Fabio Panetta (member of the Executive Board of the ECB), at the Annual Congress of the European Economic Association, he noted:


:<span style="color:#4B0082">'''''Cost of carry can be a price worth paying'''''</span>
:o    Digital public money is the monetary anchor in a digital world.
:o    The importance of safeguarding monetary sovereignty.
:o    The need to enhance competition and efficiency in payments.


:Update on treasury matters relating to the coronavirus...


:One treasurer had resisted pressure from the board to draw down on their RCF by drawing down on only 20% of the facility as a test case and then subsequently repaying the loan. They felt the cost of carry was unnecessary.
:But also the importance that a CBDC was not too successful if it crowds out private sector activity."


:Another treasurer felt the cost of carry, by drawing down on the RCF and then depositing the proceeds, was a cost-effective insurance policy.
:''ACT blog - Naresh Aggarwal - Central Bank Digital Currencies (CBDCs) and other digital currencies – September 2022.''


:''Association of Corporate Treasurers, 28 April 2020, Naresh Aggarwal, Associate Director Policy & Technical.''


== See also ==
* [[Central bank]]
* [[Central bank digital currency]]  (CBDC)
* [[Coin]]
* [[Competition]]
* [[Digital]]
* [[Digital currency]]
* [[European Central Bank]]  (ECB)
* [[European Economic Association]]  (EEA)
* [[Monetary policy]]
* [[Monetary stability]]
* [[Money]]
* [[Money supply]]
* [[Private money]]
* [[Private sector]]
* [[Public ]]
* [[Public money]]
* [[Public sector]]
* [[Sovereignty]]


== See also ==
* [[Backwardation]]
* [[Carry trade]]
* [[Contango]]
* [[Revolving credit facility]] (RCF)


==External link==
*[https://www.ecb.europa.eu/press/key/date/2022/html/ecb.sp220823~26022f4481.en.pdf Policy panel on central bank digital currencies - Fabio Panetta - European Central Bank - August 2022]
[[Category:Accounting,_tax_and_regulation]]
[[Category:The_business_context]]
[[Category:Identify_and_assess_risks]]
[[Category:Manage_risks]]
[[Category:Risk_frameworks]]
[[Category:Risk_reporting]]
[[Category:Cash_management]]
[[Category:Cash_management]]
[[Category:Financial_products_and_markets]]
[[Category:Financial_products_and_markets]]
[[Category:Liquidity_management]]
[[Category:Liquidity_management]]
[[Category:Technology]]

Latest revision as of 09:38, 19 September 2022

Economics - money supply - central banks - public money - digital currency.

The part of the money supply comprising any digital liabilities of the central bank.

For example, any central bank digital currency (CBDC).


CBDC should anchor monetary stability & complement private sector activities
"In a recent presentation by Fabio Panetta (member of the Executive Board of the ECB), at the Annual Congress of the European Economic Association, he noted:
o Digital public money is the monetary anchor in a digital world.
o The importance of safeguarding monetary sovereignty.
o The need to enhance competition and efficiency in payments.


But also the importance that a CBDC was not too successful if it crowds out private sector activity."
ACT blog - Naresh Aggarwal - Central Bank Digital Currencies (CBDCs) and other digital currencies – September 2022.


See also


External link

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