Exploring The Implications Of Digital Currencies For Conducting Monetary Policy

Shu Xiaofang (2023) Exploring The Implications Of Digital Currencies For Conducting Monetary Policy. Pénzügyi és Számviteli Kar.

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Absztrakt (kivonat)

The rapid emergence of cryptocurrencies and digital money innovations makes analyzing digital currency an urgent priority for monetary policy. This research focuses on one specific and important category of digital currency, the Central Bank Digital Currencies (CBDCs). The rise of currencies issued by banks, CBDCs, is a game-changing development, in the realm of monetary policy operations and systems. As major economies like China introduce different forms of digital currencies, it becomes crucial to examine the transformative effects this could have on policy decisions. This dissertation addresses the often overlooked issue of evaluating how the adoption of a CBDC might impact key goals, tools, and mechanisms that underpin current monetary policy frameworks. Using a mixed methods approach combining case study and quantitative VAR analysis of China's digital currency trials, the findings reveal that there are temporary fluctuations, in the supply of money interest rates, exchange rates, and bank lending when there are shocks related to CBDC. It is observed that consumer prices tend to be volatile in the term without any inflation. Various challenges arise due to financial stability risks, cyber threats, and limited policy options. When introducing a CBDC it has an impact on monetary policy intermediaries and inflation dynamics during the transition period. Therefore, it is important to remain vigilant and provide oversight as adoption progresses. Some key recommendations for policymakers include implementing CBDC adopting monetary systems utilizing adaptive interest rate tools ensuring prudential safeguards are, in place enhancing surveillance capabilities and promoting international interoperability. This research presents a practical analysis, by utilizing China's currency experiments to measure the effects of CBDCs on monetary policy indicators. It also offers recommendations for banks aiming to incorporate CBDCs taking into account the potential impact on financial innovation and stability, during this transformative era of sovereign digital currencies.

Intézmény

Budapesti Gazdasági Egyetem

Kar

Pénzügyi és Számviteli Kar

Tanszék

Pénzügy Tanszék

Tudományterület/tudományág

NEM RÉSZLETEZETT

Szak

Pénzügy és Számvitel

Mű típusa:	diplomadolgozat (NEM RÉSZLETEZETT)
Kulcsszavak:	CBDCs, Central bank digital currencies, Financial stability, monetary policy, Vector autoregression (VAR)
SWORD Depositor:	Archive User
Felhasználói azonosító szám (ID):	Archive User
Rekord készítés dátuma:	2024. Jún. 28. 10:29
Utolsó módosítás:	2024. Jún. 28. 10:29

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