Huifeng Chang

Federico Grinberg

Lucyna Gornicka

Marcello Miccoli

Brandon Tan

Resumo

Could the introduction of Central Bank Digital Currency (CBDC) lead to lower deposits (disintermediation) in the banking sector? Could CBDC reduce banks’ ability to lend? We address these questions in a simple portfolio choice model with a banking sector. In the model, households allocate their wealth between an illiquid asset and three liquid assets: cash, bank deposits and CBDC. An imperfectly competitive banking sector offers deposits to households and lending to firms. The model shows that when (i) costs of accessing CBDC are substantially lower than those of accessing deposits; and (ii) the wealth distribution is relatively more equal, then CBDC can disintermediate the banking system. The introduction of CBDC will lead banks to increase remuneration of deposits to fight the competition. The increase in remuneration will induce higher deposits by the relatively more well-off, but their aggregate wealth is not enough to compensate for the relatively less well-off population who will migrate towards CBDC. This will lead to lower deposits in the banking system, and lower bank profits. However, if costs of accessing CBDC are close to that of deposits, or society is relatively more unequal, than CBDC might not generate disintermediation at all, but banks’ profit will decrease. Even when CBDC generates disintermediation, the impact on lending turns out quantitatively small if banks have access to other forms of funding, such as wholesale or central bank financing.