In my remarks, I will focus on the implications of the evolution of new financial technologies, including but not limited to cryptocurrencies, for central banking. This testimony will accord particular attention to issues surrounding (i) the implementation and transmission of monetary policy and (ii) financial stability. I will also discuss the pros and cons of central bank digital currencies (CBDC).1
While the advent of decentralized cryptocurrencies such as Bitcoin has dominated the headlines, a broader set of changes wrought by advances in technology are likely to eventually have a more profound and lasting impact on central banks. It is premature to speak of disruption of traditional concepts of central banking, but it is worth considering if the looming changes to money, financial markets, and payments systems will have significant repercussions for the operation of central banks and their ability to deliver on key objectives such as low inflation and financial stability.
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