The adoption of blockchain-based digital currencies[1] has accelerated in the past few years as an increasing number of individuals and institutions realize this class of digital currencies is a financial innovation that could shape the future of our financial system and daily life, rather than merely a speculative asset. Wide-ranging use cases of blockchain-based digital currencies can be found in both private and public entities. For example, non-fungible tokens (NFTs), which can be used to protect the intellectual property rights of digital artwork or collectables, have been popular not only in the digital art market but also in entertainment and sports industries. Companies like National Football Association have applied NFTs to sell game pictures and videos to fans so that buyers can prove their ownership of the work and store them with collectable values. Another popular use case is cryptocurrencies as payments, both for consumptions and cross-border transactions. Payment networks like VISA have partnered with crypto companies to launch crypto debit/credit cards that allow card holders to transform cryptocurrencies to fiat currencies instantly for consumption. Retail companies like AMC and Newegg are also accepting cryptocurrencies as payment methods. On the country level, central banks around the world are developing Central Bank Digital Currencies. or CBDCs. As of December 2021, 87 countries representing over 90 percent of global GDP are exploring a CBDC, with 9 countries having fully launched a digital currency and 14 countries in the pilot stage.[2] The penetration of digital currencies in our economic activities has motivated me to think about how it would reshape the existing theoretical framework of economics, or if I could come up with new models that could be better fitted to an economy with digital currencies. Currently, my research mainly studies the implications of Central Bank Digital Currency on various macroeconomic issues.

[1] The history of electronic form of money or the concept of digital currency can be traced back to 1980s (Chaum, 1981) when DigiCash was found to commercialize the idea of digital cash. Early digital currencies were usually used only within a specific group of people who enjoyed the services of the digital currency providers. For example, online gambling companies provided digital currency to gamblers as bargaining chip to make bets. Digital currencies became widely accessible, theoretically accessible to everyone, thanks to the introduction of blockchain-based digital currency. Nowadays, blockchain-based digital currency has been widely adopted and my research will only focus on blockchain-based digital currencies like cryptocurrencies or central bank digital currencies.

[2] Atlantic Council has kept up with the most recent development of the CBDC around the world:

Reading List

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