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#266 David Andolfatto: The Impact of Central Bank Digital Currencies on the Banking Sector

Published on December 18th, 2018 by epicenterbitcoin

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Since the rise of digital currencies and cryptocurrencies, central banks are considering the role these new forms of money may play in our evolving digital economy. One of the ideas studied is the notion of a central bank digital currency. While people and companies can hold central bank liabilities in the form of cash, only licensed banks have access to digital cash accounts with central banks.

We're joined by David Andolfatto, VP of Research at the Federal Reserve Bank of St. Louis. David was previously on the podcast to discuss his idea for Fedcoin, a central bank issued cryptocurrency. In a recent paper, he explores the impact central bank digital currencies may have on the monopolistic banking sector.

Topics discussed in this episode:

  • The state of central bank research on digital currencies and cryptocurrencies
  • The idea that central banks may hold Bitcoin reserves
  • David's new paper on the impact of central bank digital currencies (CBDC)
  • The potential impacts of CBDC's on the banking sector and our economy
  • The role of fractional reserve banking in our economy
  • How fractional reserve banking applies to cryptocurrencies
  • The Debreu model and the need for money in an entirely liquid market
  • David's outlook for the future of Bitcoin and cryptocurrencies

Links mentioned in this episode:


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Epicenter is hosted by Brian Fabian Crain, Sébastien Couture, Meher Roy & Sunny Aggarwal.

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