In a world where assets are being traded electronically and payments are being made with smartphones, should there only be room for physical cash? Central Bank Digital Currency Ladies and gentlemen, distributed ledger technology is currently reshaping the financial system and is here to stay in one form or another.
In the process, banks’ intermediation is reduced, and loans to companies are curtailed. If the process is let unfold in a disorderly manner, it can create severe damage for borrowers and for the broader economy. After the demise of Lehman, liquidity hoarding was so intense that we feared bank intermediation would suffer a complete and lasting collapse.