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Consumer cash withdrawal behaviour : branch networks and online financial innovation

Chen, Heng; Strathearn, Matthew; Voia, Marcel-Christian - 2021 - Last updated: June 17, 2021

Constructing a novel micro-geographic individual-level data set, we study the relevance of shoe-leather costs on cash withdrawals. An unexplored issue in the literature is the consistent estimation of the marginal effect of travel distance on withdrawals when a fraction of unobserved withdrawals...

Persistent link: https://www.econbiz.de/10012546128

Central bank digital currency and banking: macroeconomic benefits of a cash-like design

Chiu, Jonathan; Davoodalhosseini, Seyed Mohammadreza - 2021 - Last updated: December 17, 2021

Should a central bank digital currency (CBDC) be issued? Should its design be cash- or depositlike? To answer these questions, we theoretically and quantitatively assess the effects of a CBDC on consumption, banking and welfare. Our model introduces new general equilibrium linkages across...

Persistent link: https://www.econbiz.de/10012705082

Cash in the pocket, cash in the cloud : cash holdings of Bitcoin owners

Balutel, Daniela; Henry, Christopher; Huynh, Kim P.; … - 2022 - Last updated: June 15, 2022

We estimate the effect of Bitcoin ownership on the level of cash holdings of Canadian consumers. Bitcoin ownership … average, Bitcoin owners hold 83 percent (in 2018) to 95 percent (in 2017) more cash than non-owners. Focusing on the quantiles … of cash holdings, we find that Bitcoin ownership has a highly nonlinear effect. For example, the difference in cash …

Persistent link: https://www.econbiz.de/10013256534

Best before? : expiring central bank digital currency and loss recovery

Kahn, Charles M.; Oordt, Maarten R. C. van; Zhu, Yu - 2021 - Last updated: December 24, 2021

An important feature of physical cash payments is resilience, which is due to their indifference to power outages or network coverage. Many central banks are exploring issuing digital cash substitutes with similar online payment functionality. Such substitutes could incorporate novel features,...

Persistent link: https://www.econbiz.de/10012793565

Losing contact : the impact of contactless payments on cash usage

Felt, Marie-Hélène - 2020 - Last updated: December 23, 2020

I investigate the impact of contactless credit cards (CTCs) on cash use in Canada, using panel data between 2010 and 2017. I show that ignoring unobserved heterogeneity would lead to overstating the impact of CTCs on cash usage in a linear model. Using finite mixture modelling, I provide...

Persistent link: https://www.econbiz.de/10012404480

Eggs in one basket : security and convenience of digital currencies

Kahn, Charles M.; Rivadeneyra, Francisco; Wong, Tsz-Nga - 2021 - Last updated: January 28, 2021

Digital currencies store balances in anonymous electronic addresses. We analyze the tradeoffs between the safety and convenience of aggregating balances in addresses, electronic wallets and banks. In our model, agents balance the risk of theft of a large account with the cost to safeguarding a...

Persistent link: https://www.econbiz.de/10012421984

Safe payments

Chiu, Jonathan; Davoodalhosseini, Seyed Mohammadreza; … - 2020 - Last updated: December 10, 2020

We use a simple model to study whether private payment systems based on bank deposits can provide the optimal level of safety. In the model, bank deposits backed by projects are subject to default risk that can be mitigated by a depositor's ex ante and ex post monitoring. Safe payment...

Persistent link: https://www.econbiz.de/10012388751

Why fixed costs matter for proof-of-work based cryptocurrencies

Garratt, Rod; Oordt, Maarten R. C. van - 2020 - Last updated: June 18, 2020

We assess how the cost structure of cryptocurrency mining affects the response of miners to exchange rate fluctuations … and the immutability of cryptocurrency ledgers that rely on proof-of-work. We show that the amount of mining power … supplied to currencies that rely on application-specific integrated circuits (ASICs), such as Bitcoin, responds less to adverse …

Persistent link: https://www.econbiz.de/10012243378

Explaining the interplay between merchant acceptance and consumer adoption in two-sided markets for payment methods

Huynh, Kim P.; Nicholls, Gradon; Shcherbakov, Oleksandr - 2019

The market for payment cards is inherently two sided. Consumers benefit from increased merchant acceptance of payment cards and vice versa. To quantify the interdependence of consumer and merchants or network externalities, we construct and estimate a structural two-sided model of a payment...

Persistent link: https://www.econbiz.de/10012058945

Central bank digital currency and banking

Chiu, Jonathan; Davoodalhosseini, Seyed Mohammadreza; … - 2019

This paper builds a model with imperfect competition in the banking sector. In the model, banks issue deposits and make loans, and deposits can be used as payment instruments by households. We use the model to assess the general equilibrium effects of introducing a central bank digital currency...

Persistent link: https://www.econbiz.de/10012010505