Competing digital monies

Jon Frost, Jean-Charles Rochet, Hyun Song Shin and Marianne Verdier

No 1301, BIS Working Papers from Bank for International Settlements

Abstract: We compare three competing digital payment instruments: bank deposits, digital platform tokens and central bank digital currencies (CBDCs). A simple theoretical model integrates the theory of two-sided markets and payment economics. We use the model to assess the impact of a public option such as a fast payment system that makes private payment instruments interoperable, or a CBDC that provides general access to public digital money. We show that both options are essentially equivalent for the industrial organisation of the payment system. We find that, even if they may lead to some degree of disintermediation, both options can contribute to increasing financial inclusion and improving social welfare.

Keywords: payments; CBDC; fast payments; banks; big tech; platforms (search for similar items in EconPapers)
JEL-codes: E42 E58 G21 L51 O31 (search for similar items in EconPapers)
Date: 2025-11
New Economics Papers: this item is included in nep-mon, nep-pay and nep-reg
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Persistent link: https://EconPapers.repec.org/RePEc:bis:biswps:1301

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