This motive would particularly be at play in times of crisis. The interest rate on required reserves could be used for the remuneration of the WCBDC, for reasons of simplicity and efficiency. A RCBDC would thus not necessarily be issued on a blockchain, while its circulation would most likely involve intermediaries. Also, the issuance of a RCBDC could put a floor to bank deposit rates and, if it is remunerated, raise them. The remuneration of the RCBDC would thus create a trade-off between the effectiveness of monetary policy and the cost of bank intermediation. Furthermore, the issuance of a RCBDC could put a floor to bank deposit rates and, if it is remunerated, raise them. Economics in brief Words in the news Explainers.
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