The money flower
The Bank for International Settlements has published a new report looking at the potential use of digital currencies by central banks.
See the full paper here. There is plenty to read, but most eye-catching is the money flower:
Graph 1 presents a taxonomy of money in the form of a Venn-diagram referred to as the money flower (Bech and Garratt (2017)). The version here focuses on the combinations of four key properties: issuer (central bank or other); form (digital or physical); accessibility (widely or restricted); and technology (token- or account-based).4 Money is typically based on one of two basic technologies: tokens of stored value or accounts (Green (2008) and Mersch (2017a)). Cash and many digital currencies are token-based, whereas balances in reserve accounts and most forms of commercial bank money are account-based.Earlier this week:
It looks at possible uses for digital central bank money issued to everyone, rather than just banks. This could make sense, the authors write, but could be superseded if a fast and efficient private network springs up first....MORE
"Brace yourselves for more market turmoil warns Bank for International Settlements"