Seminar on possible new forms of central bank money

Bygging Seðlabanka Íslands

Seminar on the question: Will Bitcoin give rise to new forms of central bank money?

This subject will be discussed in a seminar in Sölvhóll, the meeting room in the Central Bank on Thursday, February 9, at 11:00 hrs. Speakers will be Jón Helgi Egilsson and Sveinn Valfells, Ph.D.

A growing number of central banks, including those of Sweden, Denmark, Finland, the UK, Russia, China and India, are investigating the feasibility of issuing central bank digital currency (CBDC) using the blockchain distributed ledger technology pioneered by Bitcoin. CBDC would complement other forms of central bank money currently in circulation. A monetary regime with CBDC has never existed anywhere, mainly because the technology to make it feasible has not been available. In a recent report, researchers at the Bank of England claim that a CBDC regime could offer economic benefits; for example, it could increase output, help stabilise the business cycle, and foster financial stability.

In this workshop, we present an overview of the Bitcoin architecture and a model of the embedded economic incentives. We discuss research findings concerning CBDC to date and analyse some of the challenges central banks face in adopting blockchains.