A new paper released by the Bank of England has suggested that central bank-issued digital currencies could generate an increase in the UK's GDP, due to "reductions in real interest rates, in distortionary tax rates and in monetary transaction costs that are analogous to distortionary tax rates". The report is part of a wider series on how digital currency can be used for economic development.
A new paper released by the Bank of England has suggested that central bank-issued digital currencies could generate an increase in the UK's GDP, due to "reductions in real interest rates, in distortionary tax rates and in monetary transaction costs that are analogous to distortionary tax rates". The authors also highlighted that the use of a digital currency could provide central bankers with a new policy instrument "that controls either the quantity or the price of CBDC (central bank digital currency) in a countercyclical fashion".