A growing academic literature examines the economic implications of central bank digital currencies (CBDCs). The main focus is on their “reserves for all” aspect and the balance sheet issues for central banks, as well as the implications for monetary policy and financial stability. By contrast, in policy circles, the emphasis is on designing CBDCs to achieve public policy goals within the current two-tier payment system. This implies a division of labour between the public and private sector, thus keeping the footprint of the central bank limited.
This paper by the BIS gives a guided tour of the growing literature on the operational architectures for CBDCs, focusing on the technologies and the implications for privacy. It further examines the macroeconomic implications for the financial system, financial stability and monetary policy. Lastly, the paper highlights issues for future research.