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Central banks already issue digital money, but only to a select group of financial institutions. Central bank digital currency would extend this to households and firms. This column examines the proposal for such currency and assesses the opportunities and risks. It argues that while preparations for the launch of Libra have not proceeded according to plan, it has become clear that for central banks, maintaining the status quo is not an option.
Prof. Dr. Dirk Niepelt is Associate Professor at the University of Bern and Director of Study Center Gerzensee, Foundation of the Swiss National Bank, http://alum.mit.edu/www/niepelt, https://www.niepelt.ch/files/cv.pdf. He is Dr. oec. HSG and PhD in economics, Massachusetts Institute of Technology, Cambridge, MA, USA. Prof. Niepelt is also Board Member of Swiss Society of Economics and Statistics, Research Fellow of Centre for Economic Policy Research, London, Research Network Member of CESifo, Munich, member of Verein für Socialpolitik, Ausschuss für Makroökonomik and Deputy Member of Volkswirtschaftskommission, Kanton Bern. His interests and professional experience are among others in financial policy, Central Bank Digital Currency (CBDC), and in financial economics, international macroeconomics and growth, monetary and public economics.