Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/299513 
Year of Publication: 
2020
Series/Report no.: 
EBA Staff Paper Series No. 8
Publisher: 
European Banking Authority (EBA), Paris La Défense
Abstract: 
We introduce a digital currency, either as a central bank digital currency (CBDC) or a financial crypto asset (stablecoin), in the network of financial accounts. Simulating a shift of deposits by both households and non-financial corporations from the banking sector to the digital currency, we model the different responses of the affected institutional sectors. We find that the introduction of a digital currency generates significant adjustments in the balance sheets of all sectors, may trigger large moves in securities prices and induces changes in the network structure. The economic impacts vary depending on the design of the digital innovation, the size of the deposit shift, the channels through which the balance sheet adjustments take place and the timing of the initiative.
Subjects: 
Digital Currency
Central Bank Digital Currency
Stablecoins
Macro-network
Financial Intermediation
Financial Stability
JEL: 
G21
E58
Persistent Identifier of the first edition: 
ISBN: 
978-92-9245-677-1
Document Type: 
Working Paper

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