## Implications of Central Bank Digital Currencies for Monetary Policy Transmission

_Fintech Notes, September 15, 2023_

## Source details

**Canonical URL:** [Implications of Central Bank Digital Currencies for Monetary Policy Transmission](https://www.imf.org/en/publications/fintech-notes/issues/2023/09/15/implications-of-central-bank-digital-currencies-for-monetary-policy-transmission-538517)

## Other formats

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## Bibliographic details
- Authors: Mitali Das, Tommaso Mancini-Griffoli, Fumitaka Nakamura, Julia Otten, Gabriel Soderberg, Juan Sole, Brandon Joel Tan
- Published: September 15, 2023
- Series: Fintech Notes
- DOI: https://doi.org/10.5089/9798400252792.063

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### Overview
- Authors: Mitali Das, Tommaso Mancini-Griffoli, Fumitaka Nakamura, Julia Otten, Gabriel Soderberg, Juan Sole, Brandon Joel Tan
- Date: September 15, 2023
- Purpose: Presents an analysis of the implications of central bank digital currency (CBDC) issuance for monetary policy, distinguishing between "level effects" and "transmission effects."

### Analytical framework
- CBDC implications for monetary policy are intermediated by CBDC's impact on key parts of the macroeconomic environment.
- Distinction between:
  - "Level effects" — the introduction of CBDCs could tighten or loosen financial conditions as a shock.
  - "Transmission effects" — CBDCs change the impact of a given monetary policy shock on output, employment, and inflation.

### Main findings
- In general, the effects of CBDCs on monetary policy transmission are expected to be relatively small in normal times.
- These effects can be more significant in environments with low interest rates or financial market stress.

### Subject areas and keywords (as listed)
- Subjects: Bank deposits, Central Bank digital currencies, Central bank policy rate, Central Banks, Economic sectors, Financial inclusion, Financial markets, Financial services, Open market operations, Technology
- Keywords: Bank deposits, CBDC issuance, Central bank digital currencies, Central bank policy rate, Financial inclusion, FINTECH note, Global, IMF Fintech Note 2023/010, monetary policy, monetary policy transition, monetary policy transmission, Open market operations

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- **Ftnea2023010**
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_Source: https://www.imf.org/en/publications/fintech-notes/issues/2023/09/15/implications-of-central-bank-digital-currencies-for-monetary-policy-transmission-538517_