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| Type | Master's Thesis |
| Scope | Discipline-based scholarship |
| Title | Implementation of distributed ledger technologies by Central Banks: To what extent is central bank digital currency beneficial to the financial industry and society? |
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| Institution | University of Zurich |
| Faculty | Faculty of Business, Economics and Informatics |
| Number of Pages | 76 |
| Date | 2020 |
| Abstract Text | Since the emergence of distributed ledger technology along with cryptocurrencies, central banks and financial authorities have shown a growing interest in implementing DLT infrastructure within their financial systems. An additional event further motivated central banks to conduct research on the topic: the rise of the stablecoin, a nonvolatile cryptocurrency threatening the monetary sovereignty of fiat currencies. Based on projects led by central banks, monetary authorities, and tech companies, as well as research conducted in academia, this master’s thesis explores the different ways one central bank might design a central bank digital currency (CBDC) and the benefits arising from it, both for the financial industry and society (businesses and individuals). Components such as the country’s characteristics, cash use trends within a jurisdiction, the wholesale payment process of the central bank, financial inclusion, and the threat of stablecoin are taken into account to address the research question. Depending on these variables, results show that CBDC improves security, transparency, and speed of transactions. It would also update wholesale payments and replace old cross-border payment systems such as cheque clearinghouses. Finally, the use of CBDC would also provide a way to expand financial inclusion and stability in EME countries. |
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