A blueprint for energy systems in the era of central bank digital currencies

Journal article

Central bank digital currencies (CBDC), i.e., electronic cash issued by central banks, are currently being developed and tested in several countries, including the European Union, Canada, China, India and Australia, and will likely become widely available for individuals and businesses in the coming years. In this Perspective, we argue that, if well-designed, CBDCs could provide significant opportunities for energy system innovation and net-zero transition, while addressing certain risks associated with digital cash. We propose a blueprint of a future energy system fully integrated with CBDCs, focusing on energy markets, carbon markets, and energy project financing. We show how this integration could increase transparency, reduce costs, trigger bottom-up citizen-driven energy initiatives, facilitate whole-system regulatory oversight, enhance carbon tracking and trading, and support energy project financing, creating a wealth of opportunities for innovation, financial inclusion in energy investment, and energy consumer engagement. We conclude by identifying major sources of risk and policy implications.

Authors: Savelli, I; Hepburn, CJ; Morstyn, T

• Publication status: Published
• Peer review status: Peer reviewed
• Publisher: Elsevier
• Journal: Technological Forecasting and Social Change
• Volume: 207
• Article number: 123637
• Publication date: 2024-08-06
• Acceptance date: 2024-07-31
• DOI: 10.1016/j.techfore.2024.123637
• EISSN: 1873-5509
• ISSN: 0040-1625
• Language: English
• Keywords: blockchain; smart contract; energy market; digital currency; central bank