Chapter 5. Digital central bank money: what are the economic, ethical and democratic implications?

Abstract

Cryptocurrencies, based on blockchain technology, offer a new way of creating money and challenge the power of monetary institutions. Faced with this situation, central banks are considering Central Bank Digital Currencies (CBDCs) to adapt to new technologies, combat the proliferation of private currencies, and secure the monetary system. Furthermore, the digital euro, an interbank currency and credit instrument, would allow for a reversal of the current privilege held by private banks in creating money through lending and offer the ECB the opportunity to finance projects that are not profitable but are socially beneficial. However, this economic centralization raises questions about the guarantee of individual freedoms and the governance of the ECB. Therefore, the transition to a digital currency must be accompanied by collective ethical and political reflection.