Written evidence for the House of Lords Economic Affairs Committee inquiry on Central Bank Digital Currencies (2021), with F. Fraschini and T. Terracciano
Consumers might have some benefits from lower transaction costs, faster payments, and increased competition.
A CBDC would change the relationship between the BoE and the banking sector, with the latter becoming even more dependent on the BoE.
The BoE would have a direct channel with consumers, thus being able to implement more effective and targeted monetary policies.
A CBDC might blur the line between monetary and fiscal policy, gradually shifting responsibilities from HM Treasury to the BoE.
Whether to introduce a CBDC is mainly a political decision over the role and powers of the BoE.
Stabilizing stablecoins: a pragmatic regulatory approach (2020), with T. Terracciano
We propose a framework for regulating stablecoins as a new asset class. We de- fine stablecoins as those digital currencies which are centrally managed and backed by other assets. We compare stablecoins and ETFs under the principle that similar risks should be treated in a similar fashion (FINMA 2019). Hence, we propose to lock stablecoins into an ETF-like structure, along with restrictions on the basket composition, would significantly reduce regulatory concerns. Stablecoin providers would be functionally similar to ETF sponsors and stablecoins would be a new vehicle for traditional fiat currencies. Finally, we address common macroeconomic concerns in light of our proposed frame- work.
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