Abstract

This article provides a brief overview of the main characteristics of the existing two-tier public money payment architecture while emphasizing the numerous trade-offs that are necessary to achieve the second-best arrangement currently in use. Reforming this arrangement requires taking into account many of the old economic and legal constraints while considering the benefits of new available technologies. Some possible avenues for the joint development of central bank digital currencies (CBDCs) and cryptocurrencies and assets are outlined. Particular attention is paid to the role and function of money in a digital, data-driven economy.