by Alasdair MacLeod
Many central banks are researching retail digital currencies, which if implemented, would allow them to issue a new currency directly to the public, managed on a centralised ledger bypassing commercial banks. While there is an element of feeling the need to address new private sector currency developments which threaten central bank monopolies, specific objectives are beginning to emerge.
This article does not consider technology issues, confining its comments to the policy objectives identified in an IMF survey of central banks. It points out the dangers to individual freedom and why the application of a monetary policy extended to include central bank digital currencies are bound to fail.