Shaping the Future of Digital Currencies

Overview: The digital currencies powering the financial system of the future are likely to come in a variety of different versions. Some will be issued by central banks (what we currently call central bank digital currency, or CBDC), but others may be issued by the private sector and backed by central bank liabilities. As policymakers become more familiar with the pros and cons of issuing a digital currency (essentially the why), it’s natural that they will begin to turn their attention towards how a digital currency could be issued. Although there is still some debate as to whether digital currencies necessarily need to be issued using blockchain-based technology, the following report will, nonetheless, provide a detailed description of how a digital currency, either issued by a central bank or backed by a central bank liability, could be issued on the Celo blockchain.