Well-designed central bank digital currencies (CBDCs) could improve financial stability, says a paper published by the US Office of Financial Research.

Todd Keister and Cyril Monnet’s paper, Central Bank Digital Currency: Stability and Information, argues against the belief a CBDC would create runs on banks and other financial institutions. The authors say their paper is the first research to study how a CBDC would affect the timing of a policy response to a financial crisis.

Keister is a