University of Twente Student Theses
Different designs of CBDC, the likelihood of bank disintermediation and the impact on monetary policy : a literary review
Wilmer, Wouter (2023) Different designs of CBDC, the likelihood of bank disintermediation and the impact on monetary policy : a literary review.
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| Abstract: | Central Banks all over the world have started examining the concept of Central Bank Digital Currencies (CBDC). The specifics on the topic are still highly uncertain, such as the possible designs for CBDC, its impact on commercial banks and bank lending, the effects on monetary policy and the possible use as a monetary tool. This paper examines these topics and provides a literature review of recent scientific literature. Literature from multiple central banks, financial institutions, leading economists, but also student theses are included in this research. By conducting this literature review, it came to light that many different designs are possible when contemplating CBDCs. The impact on banks is strongly dependent on the design that is chosen by the central banks. An attractive digital currency may have big implications for the banking sector. There are also methods found to reduce the impact on commercial banks, considering the important role that banks play in the economy. The impact on monetary policy remains uncertain, though an enrichment of the monetary toolkit is possible with the introduction of CBDC. First, the key concepts of CBDC are discussed. Secondly, an overview of different design options in various literature is provided. Thirdly, the effects on commercial banks and bank lending are examined. After examining the effects on commercial banks, the effect on monetary policy is discussed. |
| Item Type: | Essay (Bachelor) |
| Faculty: | BMS: Behavioural, Management and Social Sciences |
| Subject: | 83 economics, 85 business administration, organizational science |
| Programme: | International Business Administration BSc (50952) |
| Link to this item: | https://purl.utwente.nl/essays/95221 |
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