In the article "Central bank cryptocurrencies," published in the Banks of International Settlement (BiS) Quarterly Review in September 2017, authors Morten Bech and Rodney Garratt explore the concept of central bank cryptocurrencies (CBCCs) and their potential implications for the financial system. The authors discuss the benefits and drawbacks of CBCCs while analyzing various existing and potential digital currency projects.

The authors begin by noting the increased interest in digital currencies and the potential for central banks to issue their digital currencies. CBCCs could serve as a new tool for monetary policy implementation and offer a more efficient and secure means of making payments. However, they also recognize the potential risks and challenges associated with CBCCs, including financial stability concerns, privacy issues, and technological constraints.

Bech and Garratt propose a taxonomy for money that classifies CBCCs into four categories based on their accessibility (universal or limited) and the issuer (central bank or private sector):

• Central bank-issued digital currency (CBDC): A universally accessible, central bank-issued digital currency
• Digital base money (DBM): A limited-access, central bank-issued digital currency typically used for interbank transactions
  
  
• Private digital currency (PDC): A universally accessible, privately issued digital currency
  
  
• Restricted-access digital token (RDT): A limited-access, privately issued digital currency often used for specific purposes

Retail CBCCs are digital currencies that would be accessible to the general public as an alternative to cash. The authors discuss the pros and cons of retail CBCCs. The main benefits are the potential for increased efficiency in payment systems and reduced reliance on physical cash. However, they also acknowledge that retail CBCCs may pose risks to financial stability and could raise privacy concerns if transactions are traceable.

Wholesale CBCCs, on the other hand, would be restricted to financial institutions for use in interbank transactions. The authors argue that wholesale CBCCs could enhance the efficiency and security of payment systems, particularly for cross-border transactions. They also discuss the potential challenges of wholesale CBCCs, such as interoperability between different systems and the impact on existing payment infrastructures.

Bech and Garratt analyze several existing and potential digital currency projects to illustrate the range of CBCC designs:

• The Bank of Canada's Project Jasper: A wholesale CBCC project that aims to develop a more efficient and secure interbank payment system

• The Central Bank of Nigeria's pilot project: A retail CBCC project that explores the feasibility of issuing a digital currency for the general public

• The Riksbank's eKrona project: A retail CBCC project that investigates the potential issuance of a digital version of the Swedish krona

• The Bank of England's research on CBDCs: An ongoing exploration of the potential benefits and challenges of issuing a digital currency
  
  

The authors conclude that adopting CBCCs will depend on various factors, including technological advancements, public demand, and the regulatory environment. They emphasize that central banks must carefully weigh the benefits and risks associated with CBCCs before deciding whether to implement them. Additionally, the authors note that further research is necessary to fully understand the potential implications of CBCCs for the financial system.

In my work about cryptocurrencies and international financial institutions, I have written about how institutions such as BiS are cherry-picking, selective, and opportunistic in their behaviors towards cryptocurrencies. The message is "you should not use cryptocurrencies, you should only use our money". The goal is to prevent crypto from being recognized and legalized as money and legal tender and to make it harder for humans to use crypåto and decentralized money. Instead, central banks, governments, and international institutions aim to make it more or less mandatory or "recommended" to use CBDCs and similar alternatives. Such institutions want to use parts of decentralization to create more centralization of money, monetary governance, and economics in general. 

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