How to Build a Good Digital Currency System

Banks should not be systemically responsible for issuing the core monetary instrument in the payment system, he says. "That is an anachronistic thing that doesn't need to happen" The Federal Reserve had been raising rates to try to reduce inflation, causing a duration mismatch with banks' deposits and liabilities. If you do have fully insured deposits, then you certainly have less need for liquidity coverage ratios or all that kind of stuff. It's only a few steps from there to government digital currency that I'm talking about.