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The FT Alphaville team and the Bank of England's blog dig into the complexities of Central Bank issued digital money. Both argue the problem with centrally-issued digital currencies is not a technical one, but an asset management and a political economy problem.
Although there has been a lot of discussion about how central bank digital currency could radically change payment systems – and even the financial sector as a whole – the implication for the assets on central bank balance sheets could be just as critical. The criticality relates to the fact that the central bank alone would be responsible for determining what assets to buy and it may not be as easy as just buying government bonds: They may not want to hold more for fear of distorting bond markets, political worries about monetary financing, or simply because there are not enough government bonds in circulation.
