Digital currencies, including potential central bank digital currencies (CBDC), have generated a lot of interest over the past decade, since the emergence of Bitcoin. The interest has only grown in recent months because of a desire for contactless payment methods, stemming from the coronavirus pandemic. In this post, we discuss a common distinction made between “token-based” and “account-based” digital currencies. We show that this distinction is problematic because Bitcoin and many other digital currencies satisfy both definitions.
What’s new?
Monetizing Privacy, with Michael Lee (FRBNY Staff Reports)
Estimating Policy Functions in Payments Systems using Deep Reinforcement Learning, with P. S. Castro, A Desai, H. Du and F. Rivadeneyra (Best Paper Award, NeurIPS 2020)
Monetizing Privacy with Central Bank Digital Currencies, with M. Lee (Liberty Street Economics)
COVID-19 and the Search for Digital Alternatives to Cash, with M. Lee and A. Plesset (Liberty Street Economics)
Token- or Account-Based? A digital currency Can be Both, with Michael Lee, Brendan Malone and Antoine Martin (Liberty Street Economics)
Why Fixed Costs Matter for Proof-of-Work Based Cryptocurrencies with Maarten van Oordt (Best Cryptoeconomics Paper,The Third Toronto Fintech Conference 2020)
Investigating the Impact of Global Stablecoins (I am one of many contributors to this report.)
The Economics of Distributed Ledger Technologies for Securities Settlement with E. Benos and P. Gurrola-Perez (Ledger Journal)
Who Sees the Trades? The Effect of Information on Liquidity in Inter-Dealer Markets with Michael Lee, Antoine Martin and Robert Townsend
An Application of Shapley Value Cost Allocation to Liquidity Savings Mechanisms
Privacy as a Public Good: A Case for Electronic Cash with Maarten van Oordt
Entrepreneurial Incentives and the Role of Initial Coin Offerings with Maarten van Oordt
Nonlinear Pricing and the Market for Settling Payments with Adam Copeland (Journal of Money, Credit and Banking)
Bitcoin 1, Bitcoin 2, … : An Experiment in Privately Issued Outside Monies with Neil Wallace (Economic Inquiry)
A Proposal for a Decentralized Liquidity Savings Mechanism with Side Payments with Adam Furgal, Dave Hudson and Zhiling Guo (R3 Report)
Centralized Netting in Financial Networks with Peter Zimmerman (Journal of Banking & Finance)
Project Jasper: A Canadian Experiment with Distributed Ledger Technology for Domestic Interbank Payments Settlement (I am one of many contributors to this white paper that elaborates on the BoC FSR article.)
Central Bank Cryptocurrencies with Morten Bech (BIS Quarterly Review)
Project Jasper: Are Distributed Wholesale Payment Systems Feasible Yet? with J. Chapman, S. Hendry, A. McCormack and W. McMahon (Bank of Canada Financial System Review)
CAD-coin versus Fedcoin (R3 Report)