✉news BusinessBanking first seen 8 h ago, last 41 min ago, peak #6
Who pays when digital money cannot earn interest?
Bruegel examines an unresolved design question in digital money: if a central bank digital currency or similar digital money pays no interest, holders forgo earnings they would get on bank deposits, raising the question of who bears that cost. The debate touches on how non-interest-bearing digital money would affect bank funding, monetary policy transmission and the attractiveness of cash-like digital holdings.
Why now: Central banks are actively designing digital currencies, and whether they should pay interest remains a contested and consequential policy choice.
Bruegelcentral bankscentral bank digital currency
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