New Article: Reshaping the Design of Money

Sovereign Digital Currencies: Reshaping the Design of Money and Payments Systems by Ross Buckley (University of New South Wales), Douglas Arner (University of Hong Kong), Dirk Zetzsche (University of Luxembourg), Anton Didenko (University of New South Wales), Lucien van Romburg (University of Hong Kong) :: SSRN

While Bitcoin and its progenies could be safely ignored by regulators, Facebook’s proposal for Libra, a global stablecoin, brought an immediate and potent response from regulators globally. Any proposal by the private sector to move into the creation of currency — the traditional preserve of sovereigns — was always likely to trigger such a regulatory response, as well as the launch of sovereign digital currencies by other major central banks. While China has moved first, dozens of other countries are now investigating their own central bank digital currencies or other forms of sovereign digital currency. This paper argues that central banks should first focus not on rolling out novel new forms of sovereign digital currencies, but rather on transforming their payment systems.