The Federal Reserve Bank of Philadelphia recently published a paper on central bank digital currencies (CBDCs). In the paper the Philly Fed considers a number of issues including: the possible effects of the introduction of a CBDC and the opening of central bank facilities on financial intermediation; whether a CBDC could impair the role of the financial system in allocating funds to productive project; can the financial system be organized in such a way that a CBDC will still allow the right flow of funds between savers and investors; and will a CBDC make bank runs disappear and stabilize the financial system.
