Document Type : Research Paper

Authors

• Hossein Esfandiar ¹
• teymoor mohammadi ²

¹ PhD candidate

² allmeh tabatabaei

Abstract

Thanks to Blockchain technology the future of banking can take place without intermediaries (especially banks), and in this regard, Central Bank Digital Currency (CBDCs) and stablecoins of BigTechs are mentioned as the main competitors of the new monetary era. Based on this fact and in parallel with the efforts of most countries on the (theoretical and experimental) investigation of CBDC’s aspects, this article, using a dynamic stochastic general equilibrium (DSGE) model, in the period Q1 1388 to Q4 1400, economic effects of issuance of RamzRial (Iranian CBDC) was modeled and analyzed. In our model, RamzRial is an account-based, widely available to the general public, interest-bearing and cash complementary money, and the results of the implementation of quantitative and price rule policies were examined in the presence of RamzRial. The results of the model based on the data and calibration indicate that the issuance of RamzRial, while diversifying central bank tools, will improve the effectiveness of monetary policies in the event of (supply and demand) external shocks. One of the significant results, especially for the stagflation condition of Iran’s economy, says that through issuing (an appropriate amount of) RamzRial the central bank can implement disinflation programs while reducing its unwanted negative effects on production. Also, in addition to influencing the level of production, consumption, investment and employment, the results of our model prove that with the introduction of the RamzRial in parallel with cash balances, the most important factor affecting the transmission mechanisms is the dynamics of transaction cost deviations.

Keywords

• CBDC
• Ramz Rial
• Monetary Policy
• Transaction Costs
• DSGE

Main Subjects

• Monetary economy