Disintermediation caused by CBDC can be prevented – research
Central banks can use lender of last resort power and decrease CBDC remuneration
Central banks have the tools necessary to mitigate bank disintermediation caused by the issuance of a central bank digital currency (CBDC), according to new research.
In their paper, academics Jonas Gross and Jonathan Schiller develop a model to monitor how both an interest-bearing and non-interest-bearing CBDC would change the structure of the banking sector.
“CBDCs do not negatively impact the stability of the financial sector, even though it crowds out deposits,” the authors say.
Under the
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