Competing digital monies

Jon Frost, Jean Rochet, Huyn Song Shin and Marianne Verdier
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Huyn Song Shin: BIS - Bank for International Settlements
Marianne Verdier: CRED - Centre de Recherche en Economie et Droit - Université Paris-Panthéon-Assas

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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: CBDC; Big tech; Banks; Stablecoins; Payments (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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Working Paper: Competing digital monies (2025)
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