Document Type
Article
Publication Date
2-9-2023
Abstract
Central banks may soon issue currencies that are entirely digital (CBDCs) and possibly interest bearing. A strategic analytical framework is used to investigate this innovation in the laboratory, contrasting a traditional “plain” tokens baseline to treatments with “sophisticated” interest-bearing tokens. In the experiment, this theoretically beneficial innovation precluded the emergence of a stable monetary system, reducing trade and welfare. Similar problems emerged when sophisticated tokens complemented or replaced plain tokens. This evidence underscores the advantages of combining theoretical with experimental investigation to provide insights for payments systems innovation and policy design.
Recommended Citation
Camera, G. (2023), Introducing new forms of digital money: Evidence from the laboratory. Journal of Money, Credit and Banking. https://doi.org/10.1111/jmcb.13015
Peer Reviewed
1
Copyright
The author
Creative Commons License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.
Comments
This article was originally published in Journal of Money, Credit and Banking in 2023. https://doi.org/10.1111/jmcb.13015