propagation of narratives within a financial system can have implications for the propagation of shocks within the system and the re-enforcement of biases at the individual level, as has been stressed recently by Shiller (2017). 6  Summing Up  Financial (il)literacy is an important channel through which financial instabilities can arise. Yet financial literacy is not a sufficient condition for financial stability.
In light of the rapid digitalization of the financial system, the Federal Reserve has been thinking critically about whether there is a role for a potential U.S. central bank digital currency (CBDC) in the digital payment landscape of the future and about its potential properties, costs, and benefits.