CBDCs in a High-Evasion Economy: Seigniorage, Tax Collection, and Institutional Tensions

Title

CBDCs in a High-Evasion Economy: Seigniorage, Tax Collection, and Institutional Tensions

Creator

Kaur, Harpreet; Srivastava, Surbhi; Singh, Shanu

Description

This chapter investigates the welfare implications of introducing Central Bank Digital Currency (CBDC) in an economy with tax evasion and varying degrees of central bank independence (CBI). The model considers scenarios with and without central bank independence, where the fiscal authority finances its expenditure through sales tax and/or seigniorage revenue from the central bank. The model analyses the equilibrium conditions for the coexistence of cash and CBDC, and it depends on the degree of CBI. 2026 by IGI Global Scientific Publishing. All rights reserved.

Source

Policy Implications on International Financial Economics and Banking;pp.237-264

Date

01-01-2025

Publisher

IGI Global

Coverage

Kaur H., Christ University, India; Srivastava S., Christ University, India; Singh S., Christ University, Delhi, India

Rights

Restricted Access; Hardcopy may be available in the library

Relation

ISBN: 979-833733727-2; 979-833733725-8;

Format

online

Language

English

Type

Book chapter

Identifier

https://doi.org/10.4018/979-8-3373-3725-8.ch008

https://www.scopus.com/pages/publications/105024636164?origin=resultslist