IMF Working Papers

Digital Money and Central Banks Balance Sheet

By Adrian Armas, Manmohan Singh

October 28, 2022

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Adrian Armas, and Manmohan Singh. Digital Money and Central Banks Balance Sheet, (USA: International Monetary Fund, 2022) accessed December 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Digital money is a logical step in a process of continuous technological advancement in payment systems. In response, central banks are reviewing their conduct of monetary operations in light of the new shape of financial markets and systems. The impact of digital money will depend on the type of money substitution by digital money. The paper straddles several cases where substitution of CiC (currency in circulation), and bank deposits may take place via digital money such as CBDC or other e-money, and how it would impact the central bank balance sheet. Remuneration of CBDC, if aligned to a new objective, could potentially amplify the effect on the interest rate channel of monetary policy.

Keywords: Bank deposits, CBDC, Central bank balance sheet, Currency-in-circulation, Digital money, Money base (M0), Seigniorage

Publication Details

  • Pages:

    29

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2022/206

  • Stock No:

    WPIEA2022206

  • ISBN:

    9798400224072

  • ISSN:

    1018-5941