1 research outputs found
Central Bank digital currencies : impact on the banking sector
Mestrado Bolonha em FinançasThe issuance of a Central Bank Digital Currencies (CBDC) may bring the opportunity
to revolutionize payments if its digital advantages over conventional money are
leveraged. As a digital currency, a CBDC can help the financial system to keep up with
the digital wave seen in other sectors, facilitating online business and the consumption of
digital goods, such as music, and art, among others. The issuance of a CBDC can also
have negative impacts on the financial system. Depending on the type of CBDC Central
Banks intend to issue, there are potential risks not only for the banking sector and
financial stability but also for households and businesses.
This dissertation aims to understand: (1) the impact that the issuance of a CBDC
would have on the Eurozone; (2) which CBDC designs could minimize the negative
impacts on the banking sector and financial stability; (3) how the banking sector can add
value to the Digital Euro. The method used for gathering empirical information was
through interviews, collecting testimonies from professionals in the banking sector,
whose knowledge and areas of work may shed some light on the impact of the issuance
of a Digital Euro and how the banking sector can bring value to the Digital Euro.
With this research, we can conclude that the introduction of a CBDC in the Eurozone,
the so-called Digital Euro, could negatively affect the banking sector if not designed with
it in mind. From the interviews, it was concluded that, as described in the literature
review, in the worst-case scenario, the introduction of a CBDC could lead not only to
disintermediation in payments but also, in times of crisis, to bank runs where customers
with bank deposits would convert these into deposits with the Central Bank. After
collecting the opinions of banking professionals, we concluded that the type of CBDC
that would minimize the negative impacts on the banking sector and economic stability
would be a CBDC with centralized architecture, account-based access method, a domestic
scope, indirect control by the Central Bank, thus maintaining the existing Two-Tier
System.info:eu-repo/semantics/publishedVersio