Transactional demand for central bank digital currency

Luca Nocciola and Alejandro Zamora-Pérez

No 2926, Working Paper Series from European Central Bank

Abstract: We shed light on the demand for a central bank digital currency (CBDC) as a means of payment, based on survey payment data. We provide a quantitative framework to assess transactional demand for CBDC at the point of sale, accommodating a wide range of design choices. We develop a structural model of payment means adoption and usage and estimate CBDC demand based on individuals’ preferences for payment method attributes. We disentangle the friction potentially associated to CBDC adoption, assessing two of its potential drivers: information frictions and gradual diffusion of digital payment methods. We find that modelling adoption is key to understanding CBDC demand. Finally, we show that optimal CBDC design, information campaigns, and network effects can substantially boost demand. JEL Classification: E41, E42, E47

Keywords: CBDC; money demand; payments; Random utility; structural model (search for similar items in EconPapers)
Date: 2024-04
New Economics Papers: this item is included in nep-ban, nep-cba, nep-fdg, nep-mon, nep-pay and nep-upt
Note: 2600378
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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