Getting the balance right: Crypto, stablecoin and central bank digital currency

The rise of new forms of private money is reviving a long-standing debate on the appropriate balance between private and public interests in money and payments. This paper provides an integrated policy analysis of various digital assets that may function as money, namely, bank deposits, non-backed cryp-tos, stablecoins and central bank digital currency (CBDC). This paper argues that public and private money need to coexist in order to get the best of both worlds, that is, trust and innovation. Getting the balance right, however, is no easy task. It requires a digital update of public money and the effective regulation of cryptos and stablecoins. This paper argues that convertibility between public and private money should be a leading principle both for the design of CBDC and for the regulation of stablecoins with the potential to be widely adopted as a means of payment.