WASHINGTON—Should there be limits and restrictions placed on a central bank digital currency (CBDC)?
A new study from the Federal Reserve suggests that might be the case.
How a central bank digital currency is designed will have significant effects on financial stability and banking disintermediation, research from the Federal Reserve Board states, Central Banking reported.
CBDCs should be designed with ceilings to holdings and transactions, according to study authors Sebastian Infante, Kyungmin Kim, Anna Orlik, André Silva and Robert Tetlow.
The effect of a retail CBDC on banking in normal times, say the authors, is “ambiguous.” They recommend tiered remuneration and individual and aggregate usage caps, Centra Banking noted.
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