Central Bank Digital Currency and Banking:Central Bank Digital Currency and the Risk of Financial Disintermediation
With the rapid development of the digital economy and private money,central bank digital currency has received a lot of attention.Most central banks in the world are actively exploring the possibility of issuing their own central bank digital currencies.This study investigates the economic effects of central bank digital currency(CBDC)on the financial sector,payment system,and economic output through the lens of a macroeconomic general equilibrium model.In particular,it investigates whether the introduction of a CBDC results in financial disintermediation,a topic that has been widely discussed by policymakers.It also develops a new monetarist model of banking and payments that includes a CBDC and a monopolistic banking sector.This study investigates a"deposit-like"CBDC that competes with bank deposits as a means of payment.In the model,the issuance of a CBDC disciplines the banking sector.This makes the bank raise the deposit rate and thus attract more deposits.Under a binding reserve requirement,higher deposits imply that loans are also higher.As the bank has a monopoly power,it will lower the lending rate to match the increased loan demand.A higher deposit rate and a lower loan rate imply that bank profits will fall.In the model,a lower loan rate also means that firms are facing lower borrowing costs,which will encourage them to make more investments.This leads to an expansion in economic production.As bank deposits increase after introducing a CBDC,the amount of electronic money increases.In an economy where agents face liquidity constraints,more liquid assets would relax their liquidity constraints.From the perspective of payment efficiency,the introduction of a CBDC is beneficial to the economy as it mitigates trading frictions and facilitates trade.Moreover,as the issuance of a CBDC facilitates transactions,agents will buy more goods and make more trades.Thus,consumers consume more goods,and producers produce more goods.Further,it is demonstrated that introducing a CBDC promotes production.In summary,this study indicates that the introduction of a CBDC can have positive effects on the financial sector,payment system,and economic output.In addition,it does not lead to financial disintermediation.The contributions of the study are as follows.First,it introduces a monopoly banking sector into a new monetarist model.Existing studies typically focus on competitive banking when investigating the impact of CBDC on the financial sector.Their results often reveal that the introduction of a CBDC increases a bank's deposit rate,which increases the bank's loan rate.However,an increase in the lending rate can be detrimental to the economy.In our model,as the bank has monopoly power,it can lower the lending rate as the deposit rate increases.Second,our study contributes to the heated discussion of whether the issuance of a CBDC causes financial disintermediation.In our model,we find that introducing a CBDC does not lead to financial disintermediation due to the setting of a monopoly banking.It can increase both deposits and loans.As loans grow,investment and output also grow.It also increases payment efficiency in the payment system.As mentioned earlier,the introduction of a CBDC can have positive effects on the financial sector,payment system,and economic output.Third,in recent years,there has been a growing interest in studying the impact of e-CNY in China,but the number of theoretical studies is still small.This study contributes to the literature by building a general equilibrium model,which links the financial sector,payment system,and economic output.In addition,it brings Chinese characteristics into the model and uses Chinese data to perform simulations.Thus,it has important implications for understanding the economic impact of e-CNY in China.
Central Bank Digital CurrencyBankingMonopoly PowerThe MacroeconomyNew Monetarist Model
万方数据
