Whited, Toni M.; Wu, Yufeng; Xiao, Kairong - 2022
This paper studies how introducing a central bank digital currency (CBDC) can affect the banking system. We show that … dynamic banking model to quantify the importance of these frictions and synergies for the impact of a CBDC on the banking … system. Our counterfactual analysis shows that a CBDC can replace a significant fraction of bank deposits, especially when it …