Digital Currencies and Monetary Policy in the New Era

Abstract

The centuries-old financial structure and the modern financial system are built on physical currencies. After the global financial crisis of 2008-2009 and the COVID-19 pandemic of 2020, along with the introduction of all-new cryptocurrencies and stable coins, even many central banks have voiced an interest in the introduction of digital currencies. Hence, the pros and cons of the new central bank digital currencies (CBDC) are the newest widely discussed topic. This paper focuses on the ways a new instrument, central bank digital currency (CBDC), is expected to improve the modern payment systems, increase the efficacy of monetary policy and ensure financial stability in the new era. The study concludes that although CBDCs might boost monetary policy effectiveness and financial stability, it is vital to reevaluate and thoroughly analyse the geopolitical, geoeconomic, and geostrategic implications and effects of having a CBDC.

Book Review

“…This is one of the best books on the subject and an excellent guide for readers of all levels." Bagis (2023) pointed out that "Kshetri's The Rise of Blockchains is a timely, to-the-point, and detailed book on a relatively new and still obscure topic of blockchain technology. The book focuses on this all-new phenomenon deeply impacting, sometimes disrupting, and transforming our societies, policy-making, and the global economy today.…”