Central bank digital currency and bank intermediation: medium of exchange vs. savings vehicle

Remo Nyffenegger

No 409, ECON - Working Papers from Department of Economics - University of Zurich

Abstract: This paper analyzes the effects of a retail central bank digital currency (CBDC) on bank intermediation within a general equilibrium model and provides a quantitative assessment. In the model, banks offer both transaction and savings deposits. This allows to study how a CBDC's impact varies based on its usage as a medium of exchange or as a savings vehicle. When a CBDC is used as a savings vehicle that competes with savings deposits, the level of disintermediation almost doubles compared to a scenario where the CBDC is used solely for transactions and competes only with transaction deposits.

Keywords: Central bank digital currency; bank lending; medium of exchange; savings vehicle; new monetarism; overlapping generations (search for similar items in EconPapers)
JEL-codes: E42 E50 E58 (search for similar items in EconPapers)
Date: 2022-03, Revised 2023-08
New Economics Papers: this item is included in nep-ban, nep-cba, nep-dge, nep-fdg, nep-mac, nep-mon and nep-pay
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:zur:econwp:409

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