Competing digital monies

Résumé

We compare three competing digital payment instruments: bank deposits, private stablecoins and central bank digital currencies (CBDCs). A simple theoretical model integrates the theory of two-sided markets and payment economics to assess the benefits of interoperability through a retail fast payment system organised by the central bank. We show an equivalence result between such a fast payment system and a retail CBDC. We find that both can improve financial integration and increase trade volume, but also tend to reduce the market shares of incumbent intermediaries.

Mots-clés

payments; CBDC; big tech; banks; stablecoins;

Codes JEL

E42: Monetary Systems • Standards • Regimes • Government and the Monetary System • Payment Systems
E58: Central Banks and Their Policies
G21: Banks • Depository Institutions • Micro Finance Institutions • Mortgages
L51: Economics of Regulation
O31: Innovation and Invention: Processes and Incentives