Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/279455 
Year of Publication: 
2022
Series/Report no.: 
Working Paper No. 2022-18
Publisher: 
Federal Reserve Bank of Atlanta, Atlanta, GA
Abstract: 
We consider the debut of a new monetary instrument, central bank digital currencies (CBDCs). Drawing on examples from monetary history, we argue that a successful monetary transformation must combine microeconomic efficiency with macroeconomic credibility. A paradoxical feature of these transformations is that success in the micro dimension can encourage macro failure. Overcoming this paradox may require politically uncomfortable compromises. We propose that such compromises will be necessary for the success of CBDCs.
Subjects: 
monetary systems
banknotes
central banks
digital currencies
JEL: 
E42
E58
N10
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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