This class will review central bank digital currencies and potential private-sector stablecoin alternatives, with a focus on useful applications in the payment system.

We consider the ability to substitute for the functionality of digital tokens with faster and more efficient bank-based payment systems. Almost no attention in this course will be given to Bitcoin and other speculative crypto-currencies. Effective general digital currencies and faster payment systems could be disruptive to incumbent bank franchise values. Broad use of private-sector stablecoins could disrupt the implementation of central bank monetary policy. Narrow use of stablecoins in "wholesale" financial settlement systems is a potentially significant application.