Increasing State Capacity through Central Bank Digital Currencies. A comparative account of the digital yuan and digital ruble.

Abstract

Central banks all over the world are considering the issuance of a central bank digital currency (CBDC). Amidst heightened geopolitical contestation that increasingly manifests itself in and through financial infrastructures, the issue also has vital political and economic importance. A look at the developments and rationales behind CBDC projects not only sheds light on the perceived geopolitical trends and strategies to navigate them but also informs an understanding of state capitalisms by illustrating the modes of collaboration of between states, central banks and the private sector. To this end, the chapter examines the cases of the digital yuan and the digital ruble as projects which could provide states with high degrees of capacity domestically as well as internationally. The chapter compares the two CBDC projects based on an analysis of official central bank documents, statements of board members as well as reports and commentaries by other financial and political actors.