Central Bank Digital Currency (CBDC)

This article, survey some of the potential competitive effects of central bank digital currency (CBDC) on the market for commercial bank deposits, the market for means of payments, and on the business models of banks and other payment intermediaries. CBDC could have complex competitive effects on each of these markets depending on the specific design features of its system. Some of these key features would be the capacity of CBDC to bear interest or not, how different intermediaries are involved in its distribution model, and the capacity of CBDC to be extensible, like enabling programmability. The literature suggests that the effects on commercial bank deposits and lending are likely to be manageable. The overall effects on payment intermediaries and on bank business models are still being analysed by the literature and require further investigation.

source : https://www.bloomsburycollections.com/monograph-detail?docid=b-9781509963379&pdfid=9781509963379.ch-005.pdf&tocid=b-9781509963379-chapter5

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