Public money as a store of value, heterogeneous beliefs and banks: Implications of CBDC

摘要

The bulk of cash is held for store of value purposes, with such holdings increasing in times of high economic uncertainty and only a share of the population choosing to hoard cash. We develop a Diamond and Dybvig model with cash & reserves and heterogeneous beliefs about the state of the economy that accounts for this evidence. Only consumers who are sufficiently pessimistic hold cash as a store of value. When economic uncertainty increases, consumers and banks rebalance their portfolios towards safe assets. The introduction of a retail central bank digital currency (CBDC) lowers lending and productive investment by reducing the storage cost of public money. We find that several factors can mitigate this bank disintermediation effect, including banks’ optimal response (increased relative maturity transformation), deposit insurance, a cash-like CBDC and certain state-contingent CBDC design features. CBDC has heterogeneous welfare consequences across the population. We characterize conditions under which CBDC improves social welfare.