Central Bank Digital Currencies: Key Concerns Accommodated in a Model of Classical Athenian Descent

We identify the main pros and cons that drive the interest of central banks to issue digital currencies, we discuss the key issues that such currencies raise, and we propose a model that allows them to issue digital currencies in a way that we consider best from a technical, historical, and political economy perspective. Although it seems remote, envisioning a future where money is privately produced, akin to classical Athens, it is not beyond the realms of possibility. In this scenario, the “common” good, embodied in the principles of democracy, free markets, and individual freedoms, could be supported by constraining the state's role in monetary policy. The state’s responsibilities would focus primarily on ensuring competition, alongside tackling illicit activities and preventing tax evasion. However, until then, governments are likely to adopt hybrid systems consisting of two nodes: One that provides for a state-operated digital mint, supplying electronic money on a voluntary basis, and another rich in private digital currencies, all circulating in parallel and in competition.