A unified framework for CBDC design: remuneration, collateral haircuts and quantity constraints

Arbeitspapier

We study the macroeconomic effects of central bank digital currency (CBDC) in a dynamic general equilibrium model. Timing and information frictions create a need for inside (bank deposits) and outside money (CBDC) to finance production. To steer the quantity of CBDC, the central bank can set the lending and deposit rates for CBDC as well as collateral and quantity requirements. Less restrictive provision of CBDC reduces bank deposits. A positive interest spread on CBDC or stricter collateral or quantity constraints reduce welfare but can contain bank disintermediation, especially if the elasticity of substitution between bank deposits and CBDC is small.

Object Details

• ISBN: 978-92-899-4764-0
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ECB Working Paper ; No. 2578

Classification and Topics

• Classification: Wirtschaft ; Central Banks and Their Policies ; Demand for Money ; Monetary Systems; Standards; Regimes; Government and the Monetary System; Payment Systems ; Money Supply; Credit; Money Multipliers ; Monetary Policy
• Subject: Central bank digital currency ; monetary policy ; search and matching

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Assenmacher-Wesche, Katrin ; Berentsen, Aleksander ; Brand, Claus ; Lamersdorf, Nora
• Event: Veröffentlichung
• (who): European Central Bank (ECB)
• (where): Frankfurt a. M.
• (when): 2021

Further information

• DOI: doi:10.2866/964730
• Handle: http://hdl.handle.net/10419/237717
• Last update: 10.03.2025, 11:45 AM CET