Abstract
Nakamoto, S. (2008). Bitcoin: A peer-to-peer electronic cash system. https://bitcoin.org/bitcoin.pdf outlined an alternative to the current monetary system in which banks are replaced by a peer-to-peer system to issue and transfer digital money: the Bitcoin. While Bitcoin has attracted a substantial investment volume, the system has not achieved the status of a viable alternative monetary system. However, the distributed ledger technology (DLT) underlying the payment system is being applied successfully by financial institutions and is likely to have important implications for the future of money and banking. In this paper we therefore focus on the most advanced distributed ledger application in the financial industry: R3 Corda. This paper is structured as follows. In the first section, we relate the debate about systems of money creation to the rise of Bitcoin. Next, the development of R3 Corda is discussed and the lessons learned for monetary reform. We conclude with an assessment of the scope and likelihood of monetary reform as a consequence of DLT applications by central banks.
Appendix 1: White Papers, Reports, and Speeches Related to the Intersections of Central Banking, Blockchain Technology, and/or CBDC (Central Bank Digital Currencies)
Compiled by Ashley Lannquist
World Economic Forum, Centre for the Fourth Industrial Revolution
Last updated: Nov. 18, 2019
Central Banks
Joint research or multi-party work:
VoxEU, “The Future of Digital Money” blog debates (2019) https://voxeu.org/debates/future-digital-money
Bank of Canada, Monetary Authority of Singapore
“Enabling cross-border high-value transfer using distributed ledger technologies” (2019) https://www.accenture.com/_acnmedia/PDF-99/Accenture-Cross-Border-Distributed-Ledger-Technologies.pdf
Bank of Canada, Bank of England, Monetary Authority of Singapore
“Cross-border interbank payments and settlements: Emerging opportunities for digital transformation” (2018) https://www.bankofengland.co.uk/-/media/boe/files/report/2018/cross-border-interbank-payments-and-settlements.pdf?la=en&hash=48AADDE3973FCB451E725CB70634A3AAFE7A45A3
European Central Bank, Bank of Japan
Project Stella reports (2016–2019)
Phase 3: “Synchronised cross-border payments” (2019) https://www.ecb.europa.eu/paym/intro/publications/pdf/ecb.miptopical190604.en.pdf
“Securities settlement systems: delivery-versus-payment in a distributed ledger environment” (2018) http://www.boj.or.jp/en/announcements/release_2018/data/rel180327a1.pdf
“Payment systems: liquidity saving mechanisms in a distributed ledger environment” (2017) https://www.ecb.europa.eu/pub/pdf/other/ecb.stella_project_report_september_2017.pdf
Central banks
Bank of Canada
Project Jasper collection (2017–2018)
Staff discussion & working papers:
“Crypto ‘money’: Perspective of a couple of Canadian central bankers” (2019) https://www.bankofcanada.ca/wp-content/uploads/2019/02/sdp2019-1.pdf
“Central bank digital currency and banking” (2019) https://www.bankofcanada.ca/2019/05/staff-working-paper-2019-20/
“A tale of two countries: Cash demand in Canada and Sweden” (2019) https://www.bankofcanada.ca/2019/08/staff-discussion-paper-2019-7/
“Should the central bank issue e-money?” (2018) https://www.bankofcanada.ca/wp-content/uploads/2018/12/swp2018-58.pdf
“A policy framework for e-money” (2018) https://www.bankofcanada.ca/2018/04/staff-discussion-paper-2018-5/
“Central bank digital currency and monetary policy” (2018) https://www.bankofcanada.ca/wp-content/uploads/2018/07/swp2018-36.pdf
“Central bank digital currency: Motivations and implications” (2017) https://www.bankofcanada.ca/wp-content/uploads/2017/11/sdp2017-16.pdf
“Central bank digital currencies: A framework for assessing why and how” (2016) https://www.bankofcanada.ca/2016/11/staff-discussion-paper-2016-22/
Bank of England
Staff working papers and reports
“Central bank digital currencies: design principles and balance sheet implications” (2018) https://www.bankofengland.co.uk/working-paper/2018/central-bank-digital-currencies---design-principles-and-balance-sheet-implications
“Broadening narrow money: monetary policy with a central bank digital currency” (2018) https://www.bankofengland.co.uk/-/media/boe/files/working-paper/2018/broadening-narrow-money-monetary-policy-with-a-central-bank-digital-currency.pdf
The macroeconomics of central bank issued digital currencies” (2016) https://www.bankofengland.co.uk/working-paper/2016/the-macroeconomics-of-central-bank-issued-digital-currencies
“Central banks and digital currencies,” speech by Broadbent (2016) https://www.bankofengland.co.uk/speech/2016/central-banks-and-digital-currencies
“The economics of digital currencies” (2014) https://www.bankofengland.co.uk/-/media/boe/files/digital-currencies/the-economics-of-digital-currencies
“Innovations in payment technologies and the emergence of digital currencies” (2014) https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/innovations-in-payment-technologies-and-the-emergence-of-digital-currencies.pdf
Speech by Mark Carney at Jackson Hole
“The growing challenges for monetary policy in the current international monetary and financial system” (2019) https://www.bankofengland.co.uk/-/media/boe/files/speech/2019/the-growing-challenges-for-monetary-policy-speech-by-mark-carney.pdf?la=en&hash=01A18270247C456901D4043F59D4B79F09B6BFBC
Digital currencies research home page: https://www.bankofengland.co.uk/research/digital-currencies
Bank of Finland
“The great illusion of digital currencies” (2018) https://helda.helsinki.fi/bof/bitstream/handle/123456789/15564/BoFER_1_2018.pdf?sequence=1&isAllowed=y
“Central bank digital currency” (2017) https://helda.helsinki.fi/bof/bitstream/handle/123456789/14952/BoFER_5_2017.pdf?sequence=1&isAllowed=y
Bank of France
Production implementation: Blockchain for Banking Services Pilot (2016+) SEPA Creditor Identifiers (SCI) repository sharing between banks (powerpoint presentation available)
Working paper #642, “Monetary policy and digital currencies: Much ado about nothing?” (2017)
https://www.banque-france.fr/sites/default/files/medias/documents/dt-642.pdf
Bank of Israel
“Report of the team to examine the issue of central bank digital currencies” (2018) https://www.boi.org.il/en/NewsAndPublications/PressReleases/Documents/Digital%20currency.pdf
Bank of Japan
“Digital innovation, data revolution, and central bank digital currency” (2019) https://www.boj.or.jp/en/research/wps_rev/wps_2019/data/wp19e02.pdf
Bank of Korea
“Central bank digital currency and financial stability” (2019) http://www.bok.or.kr/viewer/skin/doc.html?fn=201901310941017800.pdf&rs=/webview/result/E0002902/201901
Bank of Lithuania
Digital Collector Coin (DCC) retail CBDC test (related public documents available upon request to Bank of Lithuania or WEF)
LBChain Platform-Service - blockchain technology sandbox
Bank of Thailand
Project Inthanon phase 1 report (2019) https://www.bot.or.th/English/FinancialMarkets/ProjectInthanon/Documents/Inthanon_Phase1_Report.pdf
Central Bank of Brazil
“Distributed ledger technical research in Central Bank of Brazil” (2017) https://www.bcb.gov.br/htms/public/microcredito/Distributed_ledger_technical_research_in_Central_Bank_of_Brazil.pdf
Project Pier data and information exchange project: https://www.bcb.gov.br/en/#!/c/news/1853
Danmarks Nationalbank
“Central bank digital currency in Denmark?” (2017): https://www.nationalbanken.dk/en/publications/Documents/2017/12/Analysis%20-%20Central%20bank%20digital%20currency%20in%20Denmark.pdf
Deutsche Bundesbank
5th Annual Macroprudential Conference, Session 2 – “Central bank digital currency: the future of money and banking?” (2019) https://www.bundesbank.de/de/bundesbank/forschung/konferenzen/5th-annual-macroprudential-conference-779116
BLOCKBASTER DLT prototype with Deutsche Borse (2016–2018) https://www.bundesbank.de/resource/blob/766672/29feab3f9079540441e3abda1ed2d2c1/mL/2018-10-25-blockbaster-final-report-data.pd
European Central Bank
“In search of stability crypto-assets: are stable coins the solution?” (2019) https://www.ecb.europa.eu/pub/pdf/scpops/ecb.op230∼d57946be3b.en.pdf
“Crypto-assets: Implications for financial stability, monetary policy, and market infrastructures” (2019) https://www.ecb.europa.eu/pub/pdf/scpops/ecb.op223∼3ce14e986c.en.pdf?f2e9a2596a8f9c38c95f4735c05a0d47
Ulrich Bindseil, “CBDC - Financial system implications and control” (2019) https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3385283
Yves Mersch, “Digital base money: An assessment from the ECB’s perspective” (2017) https://www.ecb.europa.eu/press/key/date/2017/html/sp170116.en.html
Hong Kong Monetary Authority
“Whitepaper 2.0 on distributed ledger technology” (2017)
“Whitepaper on distributed ledger technology” 1.0 (2016) https://www.hkma.gov.hk/media/eng/doc/key-functions/finanical-infrastructure/Whitepaper_On_Distributed_Ledger_Technology.pdf
Monetary Authority of Singapore
Project Ubin collection (2017–2019) https://www.mas.gov.sg/schemes-and-initiatives/Project-Ubin
Norges Bank
“Central bank digital currencies” (2018) https://static.norges-bank.no/contentassets/166efadb3d73419c8c50f9471be26402/nbpapers-1-2018-centralbankdigitalcurrencies.pdf
Reserve Bank of New Zealand
“In search of gold: exploring central bank digital currency” (2018)
https://www.rbnz.govt.nz/research-and-publications/speeches/2018/speech2018-06-25
South African Reserve Bank
Crypto Assets Regulatory Working Group: “Consultation paper on policy proposals for crypto assets” (2019) https://www.resbank.co.za/Lists/News%20and%20Publications/Attachments/9037/CAR%20WG%20Consultation%20paper%20on%20crypto%20assets_final.pdf
Sveriges Riksbank (Sweden)
Gabriel Soderberg, “The e-krona – now and for the future” (2019) https://www.riksbank.se/globalassets/media/rapporter/ekonomiska-kommentarer/engelska/2019/the-e-krona--now-and-for-the-future.pdf
Petition to Riksdag: “The state’s role in the payment market” (2019) https://www.riksbank.se/en-gb/press-and-published/notices-and-press-releases/press-releases/2019/the-riksbank-proposes-a-review-of-the-concept-of-legal-tender/
Gabriel Soderberg, “Are Bitcoin and other crypto-assets money?” (2018) https://www.riksbank.se/globalassets/media/rapporter/ekonomiska-kommentarer/engelska/2018/are-Bitcoin-and-other-crypto-assets-money.pdf
Cecilia Skinglsey, “Considerations for a cashless future” (2018) https://www.riksbank.se/en-gb/press-and-published/speeches-and-presentations/2018/skingsley-considerations-for-a-cashless-future/
e-krona reports collection (2017–2019) https://www.riksbank.se/en-gb/payments--cash/e-krona/
e-krona project: Action plan for 2018 (2017) https://www.riksbank.se/globalassets/media/rapporter/e-krona/2017/handlingsplan_ekrona_171221_eng.pdf
Cecilia Skingsley, “Should the Riksbank issue an e-krona?” (2016) https://www.bis.org/review/r161128a.pdf
Swiss National Bank
Speech by Thomas Jordan: “Financial market infrastructures: Walking the line between stability and innovation” (2016) https://www.snb.ch/en/mmr/speeches/id/ref_20160926_tjn
Speech by Andrea Maechler: “The financial markets in changing times – Changes today and tomorrow: the digital future” (2018) https://www.snb.ch/en/mmr/speeches/id/ref_20180405_amr
US Federal Reserve
Federal Reserve Bank of Philadelphia working papers
Todd Keister and Daniel Sanches, “Should central banks issue digital currency?” (2019)
https://philadelphiafed.org/-/media/research-and-data/publications/working-papers/2019/wp19-26.pdf
Presentation: https://www.bis.org/events/eopix_1810/keister_pres.pdf
St. Louis Federal Reserve staff and working papers
David Andolfatto, “Assessing the impact of central bank digital currency on private banks” (2018) https://s3.amazonaws.com/real.stlouisfed.org/wp/2018/2018-026.pdf
Aleksander Berensten and Fabian Schar, “The case for central bank electronic money and the non-case for central bank cryptocurrencies” (2018) https://research.stlouisfed.org/publications/review/2018/02/13/the-case-for-central-bank-electronic-money-and-the-non-case-for-central-bank-cryptocurrencies
Atlanta Federal Reserve
Oz Shy, “Cashless stores and cash users” (2019) https://www.frbatlanta.org/research/publications/wp/2019/05/01/cashless-stores-and-cash-users.aspx
Larry D. Wall, “Some Blockchain Challenges” (2018) https://www.frbatlanta.org/cenfis/publications/notesfromthevault/06-some-blockchain-challenges-2018-06-27
Board of Governors speeches
Lael Brainard, “Cryptocurrencies, digital currencies, and distributed ledger technologies: What are we learning?” (2018) https://www.federalreserve.gov/newsevents/speech/brainard20180515a.htm
Lael Brainard, “Distributed ledger technology: implications for payments, clearing, and settlement” (2016) https://www.federalreserve.gov/newsevents/speech/brainard20161007a.htm
Joint staff working papers
“Distributed ledger technology in payments, clearing, and settlement” (2016) https://www.federalreserve.gov/econresdata/feds/2016/files/2016095pap.pdf
International Organizations & Market Infrastructure
BIS Committee on Payments and Market Infrastructure (CPMI), Markets Committee, and others
“The future of money and payments” (2019) https://www.bis.org/speeches/sp190322.pdf
“Proceeding with caution - a survey on central bank digital currency” (2019)
“Central bank digital currencies” (2018) https://www.bis.org/cpmi/publ/d174.htm
“Cryptocurrencies: Looking beyond the hype” (2018) https://www.bis.org/publ/arpdf/ar2018e5.htm
“Regulating cryptocurrencies: assessing market reactions” (2018) https://www.bis.org/publ/qtrpdf/r_qt1809f.htm
“Money in the digital age: what is the role for central banks”? (2018) https://www.bis.org/speeches/sp180206.htm
“DLT in payment, clearing and settlement: An analytical framework” (2017) https://www.bis.org/cpmi/publ/d157.htm
“Central bank cryptocurrencies” (2017) https://www.bis.org/publ/qtrpdf/r_qt1709f.htm
“Digital currencies” (2015) https://www.bis.org/cpmi/publ/d137.ht
Inter-American Development Bank
“Digital central bank money and the unbundling of the banking function” (2016) https://publications.iadb.org/en/publication/12439/digital-central-bank-money-and-unbundling-banking-function
IMF
“Designing central bank digital currencies” (2019) https://www.imf.org/en/Publications/WP/Issues/2019/11/18/Designing-Central-Bank-Digital-Currencies-48739
“From stable coins to central bank digital currencies” (2019) https://blogs.imf.org/2019/09/26/from-stablecoins-to-central-bank-digital-currencies/
“The rise of digital money” (2019) https://www.imf.org/en/Publications/fintech-notes/Issues/2019/07/12/The-Rise-of-Digital-Money-47097
“Stable coins, CBDC, and cross-border payments: A new look at the international monetary system” (2019) speech by Tobias Adrian https://www.imf.org/en/News/Articles/2019/05/13/sp051419-stablecoins-central-bank-digital-currencies-and-cross-border-payments
“Monetary policy with negative interest rates: decoupling cash from electronic money” (2019) https://www.imf.org/en/Publications/WP/Issues/2018/08/27/Monetary-Policy-with-Negative-Interest-Rates-Decoupling-Cash-from-Electronic-Money-46076
“Casting Light on Central Bank Digital Currencies” (2018) https://www.imf.org/en/Publications/Staff-Discussion-Notes/Issues/2018/11/13/Casting-Light-on-Central-Bank-Digital-Currencies-46233
Speech by Christine Lagarde: “Winds of Change: The Case for New Digital Currency”: https://www.imf.org/en/News/Articles/2018/11/13/sp111418-winds-of-change-the-case-for-new-digital-currency
ISSA (International Securities Services Association)
“DLT: Principles for industry-wide acceptance” (2018) https://www.issanet.org/e/pdf/2018-06_ISSA_DLT_report_version_1.0.pdf
“Infrastructure for crypto-assets: A review by infrastructure providers” (2018) https://www.issanet.org/e/pdf/2018-10_ISSA_report_Infrastructure_for_Crypto-Assets.pdf
SWIFT
“GPI real-time Nostro Proof of Concept” (2018) https://www.swift.com/news-events/press-releases/swift-completes-landmark-dlt-poc
“SWIFT on Distributed Ledger Technologies” (2016)
World Economic Forum
“Central banks and distributed ledger technology: How are central banks researching blockchain today?” (2019) http://www3.weforum.org/docs/WEF_Central_Bank_Activity_in_Blockchain_DLT.pdf
Technology, Consulting, Finance, and Other
Accenture
“Do central banks need to issue currency?” (speech at Hamburg Institute of International Economics by Ousmène Mandeng, Senior Advisor to Accenture’s Global Blockchain practice) https://www.economicsadvisory.com/comments/18-9-5-Do-central-banks-need-to-issue-currency.html
“The (R)evolution of Money: Blockchain Empowered Digital Currencies ” (2017) https://www.accenture.com/t20171116T025715Z__w__/us-en/_acnmedia/PDF-63/Accenture-Evolution-Money-Blockchain-Digital-Currencies.pdf
BBVA,
“Central bank digital currencies: Assessing implementation possibilities and impacts” (2017) https://www.bbvaresearch.com/en/publicaciones/central-bank-digital-currencies-assessing-implementation-possibilities-and-impacts/
IBM & OMFIF (joint paper)
“Central Bank Digital Currencies” (2018) https://www.omfif.org/media/5415789/ibm-central-bank-digital-currencies.pdf
Positive Money
“Digital Cash: Why central banks should start issuing electronic money” (2016) https://positivemoney.org/wp-content/uploads/2016/01/Digital_Cash_WebPrintReady_20160113.pdf
R3
“Fedcoin: A central bank-issued cryptocurrency” (2016) https://static1.squarespace.com/static/55f73743e4b051cfcc0b02cf/t/58c7f80c2e69cf24220d335e/1489500174018/R3+Report-+Fedcoin.pdf
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Articles in the same Issue
- Frontmatter
- Research Articles
- Futures of Money – Monies of the Future. Introduction
- Stablecoins, Central Bank Digital Currencies and US Dollar Hegemony
- Privatizing Cash: Currency and Public Goods in Sweden
- Distributed Ledger Technology and the Future of Money and Banking
- Digital Payments in China: Some Questions for a Pragmatist Anthropology of Money
- Potential Implications of Retail Central Bank Digital Currency for Banking Systems Identified in the Literature and by Central Banks
- Reviewers: 2020-2023
- Reviewers: 2020–2023
Articles in the same Issue
- Frontmatter
- Research Articles
- Futures of Money – Monies of the Future. Introduction
- Stablecoins, Central Bank Digital Currencies and US Dollar Hegemony
- Privatizing Cash: Currency and Public Goods in Sweden
- Distributed Ledger Technology and the Future of Money and Banking
- Digital Payments in China: Some Questions for a Pragmatist Anthropology of Money
- Potential Implications of Retail Central Bank Digital Currency for Banking Systems Identified in the Literature and by Central Banks
- Reviewers: 2020-2023
- Reviewers: 2020–2023