Central bank digital currencies (CBDCs) have emerged as a transformative force reshaping the world of currency and finance. Among the nations embarking on this groundbreaking journey is Russia, as it has recently launched its own digital ruble.
What is a CBDC? Why is Russia launching a digital currency now? To gain insights on these questions, we spoke to David Andolfatto, former Senior Vice President at the Federal Reserve Bank of St. Louis and Chair of the Economics Department at the University of Miami Herbert Business School, and Marco Santanché, a former Credit Suisse quant strategist, and the author of the monthly series Quant Evolution.
The transcript below has been abridged and edited for improved clarity. For the full version of the interview, please refer to our video podcast.
Hedder: How do CBDCs differ from traditional currencies and what potential benefits can they offer to the economy and to everyday people?
Andolfatto: The first thing we should understand is that most money today already consists of electronic money. Think of your checking account, for example. I’d liken a CBDC to just having an online checking account with your central bank. The main difference is that bank deposits are…
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