This report argues that including proof-of-stake cryptocurrency block rewards in gross income when the reward tokens are first created results in inequitable taxation and would discourage U.S. taxpayers from participating in this new technology. The better approach is to tax reward tokens when...

We study how the introduction of a central bank-issued digital currency affects interest rates, the level of economic activity, and welfare in an environment where both central bank money and private bank deposits are used in exchange. Banks in our model are financially constrained, and the...

Monetary policy space remains constrained by the lower bound in many countries, limitingthe policy options available to address future deflationary shocks. The existence of cashprevents central banks from cutting interest rates much below zero. In this paper, we considerthe practical feasibility...

Cryptocurrencies are based on cryptography-based asset disposals broadcasted peer-to-peer to be validated decentrally according to consensus mechanisms in compliance with consented protocols. Protocol development is associated with risks, and there are conflicts of interests. Collusion involving...

Financial technology (Fintech) has prompted authorities to consider their potential financial stability benefits, risks, and effective regulation. Recent developments suggest that regulatory approaches and their legal foundations need to augment entity-based regulation with increasing focus on...

Payment methods have a high degree of inertia making change slow and challenging for new alternatives. So, it is not surprising that crypto currencies based on public blockchains are not broadly used 13 years after Bitcoin launched. The future of the largest public blockchains is limited,...

We study how the introduction of central bank digital currency affects interest rates, the level of economic activity, and welfare in an environment where both central bank money and private bank deposits are used in exchange. We highlight an important policy tradeoff: While a digital currency...

We examine the use of central bank capital as an unconventional monetary policy tool. In this setting, a central bank employs digital currency to transfer digital cash to each household, thus supporting consumption directly when needed. The asset side of the central bank's balance sheet remains...

We examine the use of central bank capital as an unconventional monetary policy tool. In this setting, a central bank employs digital currency to transfer digital cash to each household, thus supporting consumption directly when needed. The asset side of the central bank's balance sheet remains...