The creation of central bank digital currencies to address economic inequality with new retail loan and payments channels must be designed so they don’t “cannibalize” a country’s commercial financial system, according to JPMorgan Chase & Co.

If set up hastily, retail CBDCs could risk “disintermediating commercial banks” and lead to the exodus of 20% to 30% of their funding base — “potentially rapidly under stress,” JPMorgan strategist Josh Younger wrote in a note Thursday.

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