Competing digital monies

Jon Frost, Jean-Charles Rochet (), Huyn Song Shin and Marianne Verdier
Additional contact information
Jon Frost: BIS - Bank for International Settlements
Jean-Charles Rochet: TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement
Huyn Song Shin: BIS - Bank for International Settlements
Marianne Verdier: CRED - Centre de Recherche en Economie et Droit - Université Paris-Panthéon-Assas

Working Papers from HAL

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)
Date: 2025-05-23
Note: View the original document on HAL open archive server: https://hal.science/hal-05081338v1
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