CBDCs, Payment Firms, and Geopolitics

Tobias Berg, Jan Keil, Felix Martini and Manju Puri

No 32857, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We analyze the effect of a major central bank digital currency (CBDC) – the digital euro – on the payment industry to find remarkably heterogeneous effects. Stock prices of U.S. payment firms decrease, while stock prices of European payment firms increase in response to positive announcements on the digital euro. Bank stocks do not react. We estimate a loss in market capitalization of USD 127 billion for U.S. payment firms, vis-à-vis a gain of USD 23 billion for European payment firms. Our results emphasize the medium-of-exchange function of CBDCs and point to a novel geopolitical dimension of CBDCs: enhanced autonomy in payments.

JEL-codes: G1 G20 G21 G22 G23 G24 G28 G29 (search for similar items in EconPapers)
Date: 2024-08
New Economics Papers: this item is included in nep-cba, nep-fdg, nep-fmk, nep-ifn, nep-mon and nep-pay
Note: CF ME
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Working Paper: CBDCs, Payment Firms, and Geopolitics (2024)
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