David, as always, terrific piece today. The exorbitant privilege of the world’s reserve currency appears to be somewhat underappreciated by US policy makers. Clearly, Federal Reserve leaders – Powell and Brainard – understand, but who has policy responsibility – the Fed, the Congress, the President? With very many nations, including China most prominently, launching digital currencies one such nation will eventually figure out how to supplant the dollar, much as the dollar replaced sterling. With most attention on retail transactions, the much larger opportunity/problem is in the enterprise space. With two former IBM colleagues, we have a soon-to-be-published paper that works out the implementation of the Bank of England digital currency protocols. The SSRN version has received some attention among the central bank community. Enterprise Payments with Central Bank Digital Currency. The surprising finding is that transaction confidentially could be a very significant issue.
In our model all transactions remain confidential except to the Central Bank which processes all transactions. There are alternatives but a loss in efficiency would be the trade off.
David, as always, terrific piece today. The exorbitant privilege of the world’s reserve currency appears to be somewhat underappreciated by US policy makers. Clearly, Federal Reserve leaders – Powell and Brainard – understand, but who has policy responsibility – the Fed, the Congress, the President? With very many nations, including China most prominently, launching digital currencies one such nation will eventually figure out how to supplant the dollar, much as the dollar replaced sterling. With most attention on retail transactions, the much larger opportunity/problem is in the enterprise space. With two former IBM colleagues, we have a soon-to-be-published paper that works out the implementation of the Bank of England digital currency protocols. The SSRN version has received some attention among the central bank community. Enterprise Payments with Central Bank Digital Currency. The surprising finding is that transaction confidentially could be a very significant issue.
In our model all transactions remain confidential except to the Central Bank which processes all transactions. There are alternatives but a loss in efficiency would be the trade off.