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What could a central bank digital currency look like in the euro area? The outcome of a hackathon exercise
Central bank digital currency (CBDC) has become a widely discussed subject in central banking. Most of the literature, however, has been theoretical, and there exists no precise description of what a CBDC could look like in a major economy. The Bank of Finland conducted an internal hackathon exercise to shed more light on the practical questions of a CBDC. This paper presents the findings of that exercise. It is a model of a CBDC for the eurozone, and it attempts to approach the question from an operational point of view. The model is not a suggestion, and it probably omits many important considerations. However, by presenting one possible description of a CBDC, it contributes to the policy discussion and provides a practical reference that exemplifies the degree of complexity that central banks will be facing when considering the issuance of a CBDC.
The full article is available to institutions that have subscribed to the journal.
Aleksi Grym is Head of FinTech and Principal Adviser at the Bank of Finland. His main areas of responsibility at the Finnish central bank include FinTech, digital currencies and emerging payment technologies. He is also a former entrepreneur and consultant with two decades of experience in technology, finance, public policy and international business. Aleksi holds two master’s degrees and is a Fulbright scholar.