imported>Doug Williamson |
imported>Administrator |
| Line 1: |
Line 1: |
| ''Central bank digital currency (CBDC) - government debt - default.''
| | Redemption. |
| | |
| In the context of central bank digital currencies (CBDCs), defaultable debt refers to conventional government debt.
| |
| | |
| Conventional government debt, the argument goes, is a liability of the government that carries the possibility of default.
| |
| | |
| By contrast, a CBDC is not defaultable.
| |
| | |
| | |
| :<span style="color:#4B0082">'''''CBDC can reduce government financing costs'''''</span>
| |
| | |
| :"CBDC issuance against government debt can reduce government financing costs in two ways.
| |
| | |
| | |
| :First, by increasing the share of financing that pays the lower interest rate on CBDC.
| |
| | |
| | |
| :And second, by reducing the outstanding stock of defaultable government debt and thereby reducing all equilibrium interest rates...
| |
| | |
| :As argued by Kumhof et al. (2020), government debt is defaultable and is therefore a liability of the government, while CBDC is not defaultable and is not a liability of the government but rather a hybrid instrument that is closer to equity (in the nation) rather than debt."
| |
| | |
| :''CBDC policies in open economies - BIS Working Paper No 1086 - April 2023 - p24.''.
| |
| | |
|
| |
|
| == See also == | | == See also == |
| * [[Bank for International Settlements]] (BIS) | | * [[Redemption]] |
| * [[Blockchain]]
| | |
| * [[Britcoin]]
| |
| * [[Central bank]]
| |
| * [[Central bank digital currency]] (CBDC)
| |
| * [[Central bank money]]
| |
| * [[Commercial bank money]]
| |
| * [[Currency]]
| |
| * [[Debt]]
| |
| * [[Default]]
| |
| * [[Digital currency]]
| |
| * [[Digital Dollar Project]] (DDP)
| |
| * [[Digital euro]]
| |
| * [[Digital public money]]
| |
| * [[Distributed ledger]]
| |
| * [[e-krona]]
| |
| * [[e-money]]
| |
| * [[European System of Central Banks]]
| |
| * [[Fiat currency]]
| |
| * [[Gilts]]
| |
| * [[Gold standard]]
| |
| * [[Hybrid ]]
| |
| * [[Interest rate]]
| |
| * [[Monetary]]
| |
| * [[Money]]
| |
| * [[Multi-CBDC arrangement]]
| |
| * [[Payment Interface Provider]] (PIP)
| |
| * [[Project Icebreaker]]
| |
| * [[Project Mariana]]
| |
| * [[Retail central bank digital currency]] (rCBDC)
| |
| * [[Sand Dollar]]
| |
| * [[Sovereignty]]
| |
| * [[Stablecoin]]
| |
| * [[Wholesale central bank digital currency]] (wCBDC)
| |
| | |
|
| |
|
| ==Other resource==
| |
| * [https://www.bis.org/publ/work1086.pdf CBDC policies in open economies - BIS Working Paper No 1086 - April 2023]
| |
