New Research from MET Economics Professor Makes Case for Reinventing Money through Centralized Digital Currency

As faculty research fellow for BU’s Frederick S. Pardee Center for the Study of the Longer-Range Future, economist and MET Visiting Professor of the Practice James Stodder focuses his research on the enduring value of bartering and the countercyclical effectiveness of community-based digital currencies (CBDCs), such as Massachusetts’ BerkShares.

In vital new research featured in VOX-EU’s CEPR blog, Stodder and his international coauthors outline findings concerning the benefits of well designed, community-based digital currencies, which are public and transparent and work to complement our current financial system, contrasted with the disruptive model of cryptocurrencies like Bitcoin.

The benefit, Stodder and his coauthors suggest, of these “social currencies” is that when properly designed, they can help stabilize financial and monetary systems. What’s more, they say, is “if most people [held] CBDCs instead of checking accounts, banks would no longer be ‘too big to fail.’” This means, according to Stodder and company, that banks would operate more traditionally, and carry less risk.

As Dr. Stodder teaches his students in Multinational Finance and Trade (MET AD 763), he believes collaboration between nations is especially vital as it pertains to a prospective carbon tax. “For young students, this international dimension of carbon taxes will be “on the table” for the rest of their lives—and probably their children’s lives as well,” he says.