Book contents
- Totalitarian Money?
- Totalitarian Money?
- Copyright page
- Epigraph
- Contents
- Figures and Tables
- Acknowledgements
- Preface
- 1The Case against Central Bank Digital Currencies
- 2Background and History of Central Bank Digital Currencies
- 3CBDC Fundamentals
- 4Private Digital Currencies
- 5CBDC Controversies in Different Countries
- 6CBDC Experiences to Date
- 7CBDCs and Macroeconomic Policy
- 8A CBDC Could Disintermediate the Banking System
- 9CBDCs and Financial Inclusion
- 10On the Importance of Financial Privacy
- 11CBDCs as Weaponised Currency
- 12A Reform Agenda for an Efficient Payments System
- Bibliography
- Index
7 - CBDCs and Macroeconomic Policy
Published online by Cambridge University Press: 18 June 2026
Book contents
- Totalitarian Money?
- Totalitarian Money?
- Copyright page
- Epigraph
- Contents
- Figures and Tables
- Acknowledgements
- Preface
- 1The Case against Central Bank Digital Currencies
- 2Background and History of Central Bank Digital Currencies
- 3CBDC Fundamentals
- 4Private Digital Currencies
- 5CBDC Controversies in Different Countries
- 6CBDC Experiences to Date
- 7CBDCs and Macroeconomic Policy
- 8A CBDC Could Disintermediate the Banking System
- 9CBDCs and Financial Inclusion
- 10On the Importance of Financial Privacy
- 11CBDCs as Weaponised Currency
- 12A Reform Agenda for an Efficient Payments System
- Bibliography
- Index
Summary
Chapter 7 examines a variety of claimed macroeconomic uses of CBDCs.
CBDCs could be used to carry out helicopter money drops. However, such drops can already be carried out in other ways, and the obstacle to using them is not implementing the helicopter drop, but the time needed to plan the distribution.
CBDCs could be used to implement a digital version of an ‘expiring money’ policy of the type first proposed by Silvio Gesell in 1891 to boost demand in a depression. This is a potentially promising policy in a depressive environment and evidence from the 1930s suggests that applied locally it has locally stimulative effects.
CBDCs could be used alongside the abolition of cash to help implement negative interest rate policies (NIRP). However, a NIRP is a tax in sheep’s clothing and empirical evidence to date suggests that such policies do not stimulate the economy.
CBDCs could be used to end fractional reserve banking, but there are other ways that do not involve CBDCs, and such a policy is questionable anyway.
Information
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- Totalitarian Money?The Case against Central Bank Digital Currencies, pp. 102 - 110Publisher: Cambridge University PressPrint publication year: 2026
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