Competing digital monies

Jon Frost, Jean Rochet, Huyn Song Shin and Marianne Verdier

No 25-1644, TSE Working Papers from Toulouse School of Economics (TSE)

Abstract: We compare three competing digital payment instruments: bank deposits, private stablecoins and central bank digital currencies (CBDCs). A simple theoretical model integrates the theory of two-sided markets and payment economics to assess the benefits of interoperability through a retail fast payment system organised by the central bank. We show an equivalence result between such a fast payment system and a retail CBDC. We find that both can improve financial integration and increase trade volume, but also tend to reduce the market shares of incumbent intermediaries.

Keywords: payments; CBDC; big tech; banks; stablecoins (search for similar items in EconPapers)
JEL-codes: E42 E58 G21 L51 O31 (search for similar items in EconPapers)
Date: 2025-05-22
New Economics Papers: this item is included in nep-cba, nep-fdg, nep-fmk, nep-mon, nep-pay and nep-reg
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Persistent link: https://EconPapers.repec.org/RePEc:tse:wpaper:130555

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