heterogeneous beliefs about bank stability that accounts for this evidence. Consumers who are sufficiently pessimistic prefer to … hold cash. In our model, the introduction of a central bank digital currency (CBDC) as a store of value that is superior to … cash leads to bank disintermediation as some depositors opt for switching to CBDC based on their beliefs. While CBDC …

We estimate a dynamic banking model to quantify the impact of a central bank digital currency (CBDC) on the banking … system. Our counterfactuals show that a one-dollar introduction of CBDC replaces bank deposits by around 80 cents on the … margin. Bank lending falls by one-fourth of the drop in deposits because banks partially replace lost deposits with wholesale …

This paper analyzes the potential effect of a European Central Bank Digital Currency (CBDC) on banks' profitability. We … deposits. Using quantile regression, we estimate the conditional profit distribution of a representative bank. We then …

broadly echoes policy makers' concerns about bank disintermediation and financial stability risks, it also provides conditions …