financial frictions
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US Treasury Research: Digital Currency May Reduce Financial System Volatility, but May Bring Risks to Banks
On March 23, the Financial Research Office of the US Treasury Department recently released a research report stating that financial frictions may limit the potential benefits of digital currencies, whether publicly issued as central bank digital currency (CBDC) or privately issued as stable currency. In addition, when digital currencies are fully integrated, the volatility of the financial system will decrease and household welfare will improve, but the stability of the banking sector will be affected. Interpretation of this information: The US Treasury Department’s Financial Research Office released a report on…
