this post was submitted on 16 Apr 2023
1 points (100.0% liked)

Finance

218 readers
2 users here now

Economic and financial news from around the world, including cryptocurrency and blockchain.


This community's icon was made by Aaron Schneider, under the CC-BY-NC-SA 4.0 license.

founded 2 years ago
MODERATORS
 

A financial model investigating the issuance of digital money as central bank digital currency (CBDC) or as stablecoins found that a fully-integrated digital currency would lead to higher and less volatile asset prices, and household welfare gains are potentially large which could lead to an increase in consumption by up to 2%.

However, a fully-integrated digital currency would depress bank deposit spreads, particularly during times of crises, which limits the banks’ abilities to recapitalize losses after a bank crises. These investment losses, not specifically bank runs, create instability, the paper argues.

Another research paper found that bank runs are not as big as initially feared. This paper can be found here: https://www.financialresearch.gov/working-papers/2022/07/11/central-bank-digital-currency/

Both papers focus on the issuance of CBCD and stablecoins and do not include privately issued money like LETS/Time Dollars and similar privately issued complementary currency systems.

(Edited to correct a typo.)

no comments (yet)
sorted by: hot top controversial new old
there doesn't seem to be anything here