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Central bank digital currencies: the asset-side limitation

Summary:
In January 2014 this blogger (naively) pitched the case for official e-money: digital money issued by a central bank directly to the population.The logic of the proposal at the time seemed obvious.Official e-money would…Allow the central bank to better control the money supply, making everything from negative rates and true (inflationary) helicopter drops to basic income possible.Encourage transparency and traceability.Reduce money laundering, tax evasion and all other socially destructive black market activities enabled by cash.Create a potentially limitless source of safe asset value, at an interest rate that the central bank could control.Restrict bank deposits (and interest rate-based returns) to the risk inclined, leading to the eventual shuttering of national deposit insurance

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In January 2014 this blogger (naively) pitched

Izabella Kaminska
Izabella Kaminska joined FT Alphaville in October 2008, which was, perhaps, the best time in the world to become a financial blogger. Before that she worked as a producer at CNBC, a natural gas reporter at Platts and an associate editor of BP’s internal magazine. She has also worked as a reporter on English language business papers in Poland and Azerbaijan and was a Reuters graduate trainee in 2004.

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