{"id":13927,"date":"2024-07-15T13:01:58","date_gmt":"2024-07-15T11:01:58","guid":{"rendered":"https:\/\/www.uni.lu\/fdef-en\/?post_type=news&p=13927"},"modified":"2024-08-08T10:07:47","modified_gmt":"2024-08-08T08:07:47","slug":"the-future-of-finance-with-the-revolution-of-digital-currencies","status":"publish","type":"news","link":"https:\/\/www.uni.lu\/fdef-en\/news\/the-future-of-finance-with-the-revolution-of-digital-currencies\/","title":{"rendered":"The future of finance with the revolution of digital currencies"},"content":{"rendered":"\n
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In a recent article<\/a> published in Silicon our expert Diane Pierret, assistant professor in the department of finance, discusses her colleague Martina Fraschini\u2019s paper on the role of monetary policies in mitigating risks of digital currencies for banks..<\/p>\n\n\n\n

The European Central Bank (ECB) is conditioning for the possible emergence of a digital euro, which would complement cash by providing a digital payment method backed by the ECB. As a Central Bank Digital Currency (CBDC), the digital euro would offer a new way for consumers to use public money digitally.<\/p>\n\n\n\n

While the digital euro will not replace cash or bank accounts, its introduction could lead to significant transfers of deposits from commercial banks to the ECB, potentially impacting banks’ funding and lending capacities. However, this outcome is influenced by monetary policy and the extent of excess reserves held by banks at the central bank.<\/p>\n\n\n\n

Professor Martina Fraschini<\/a>‘s research, assistant professor in the digital finance, highlighted by ECB President Christine Lagarde and Nobel Laureate Philip Dybvig, emphasizes these challenges. Understanding these economic mechanisms is crucial as the European Parliament considers legislation for the digital euro.<\/p>\n\n\n\n

Professor Diane Pierret’s research at the University of Luxembourg focuses on empirical banking, central bank interventions, and monetary policy, contributing valuable insights into the potential impacts of the digital euro.<\/p>\n\n\n\n