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 … transactions to deposit creation. The general equilibrium effects of a CBDC are decomposed into three channels: payment efficiency …

effects of introducing a central bank digital currency (CBDC). We identify a new channel through which the CBDC can improve … the efficiency of bank intermediation and increase lending and aggregate output even if its usage is low, i.e., the CBDC … model to the US economy and find that with a proper interest rate, CBDC can raise bank lending by around 7% and increase …

potential benefits, including the possibility that it can bear interest. However, using CBDC is costly for agents, perhaps … because they lose their anonymity when using CBDC instead of cash. I study optimal monetary policy when only cash, only CBDC …, or both cash and CBDC are available to agents. If the cost of using CBDC is not too high, more efficient allocations can …

currencies has raised questions about whether there is a need for a central bank digital currency (CBDC) and, if so, what its …, we conduct a counterfactual experiment of an introduction of CBDC and simulate post-introduction consumer adoption and …

This paper investigates how the introduction of an interest-bearing central bank digital currency (CBDC) that serves as … deposit market is not fully competitive, the CBDC tends to weaken the pass-through of the interest on reserves. The interest … on CBDC impacts the deposit market more directly compared with the interest on reserves. The CBDC rate can also have …

To what extent does a central bank digital currency (CBDC) compete with bank deposits? To answer this question, we … products, and the access to in-branch services. A non-interest-bearing CBDC that does not provide complementary financial … CBDC holding would effectively mitigate this crowding out. …