Research / BFI Working PaperFeb 13, 2024

On Digital Currencies

I discuss private and central-bank-issued digital currencies, summarizing my prior research. I argue that prices of private digital currencies such as bitcoin follow random walks or, more generally, risk adjusted martingales. For central bank digital currencies, I argue that they enhance the “CBDC trilemma” facing a central bank: out of the three objectives, price stability, efficiency, and monetary trust, it can achieve at most two.

More Research From These Scholars

BFI Working Paper Dec 13, 2020

Central Bank Digital Currency: When Price and Bank Stability Collide

Linda Schilling, Jesús Fernández-Villaverde, Harald Uhlig
Topics:  Monetary Policy
BFI Working Paper Apr 20, 2021

Macroeconomic Dynamics and Reallocation in an Epidemic: Evaluating the “Swedish Solution”

Dirk Krüger, Harald Uhlig, Taojun Xie
Topics:  COVID-19
BFI Working Paper Mar 1, 2009

Unit Roots in White Noise

Alexei Onatski
Topics:  Fiscal Studies, Monetary Policy