Template-Type: ReDIF-Paper 1.0
Author-Name: Jon Frost
Author-X-Name-First: Jon
Author-X-Name-Last: Frost
Author-Name: Jean-Charles Rochet
Author-X-Name-First: Jean-Charles
Author-X-Name-Last: Rochet
Author-Name: Hyun Song Shin
Author-X-Name-First: Hyun
Author-X-Name-Last: Song Shin
Author-Name: Marianne Verdier
Author-X-Name-First: Marianne
Author-X-Name-Last: Verdier
Title: Competing digital monies
Abstract: We compare three competing digital payment instruments: bank deposits, digital platform tokens and central bank digital currencies (CBDCs). A simple theoretical model integrates the theory of two-sided markets and payment economics. We use the model to assess the impact of a public option such as a fast payment system that makes private payment instruments interoperable, or a CBDC that provides general access to public digital money. We show that both options are essentially equivalent for the industrial organisation of the payment system. We find that, even if they may lead to some degree of disintermediation, both options can contribute to increasing financial inclusion and improving social welfare.
Creation-Date: 2025-11
File-URL: https://www.bis.org/publ/work1301.pdf
File-Format: Application/pdf
File-Function: Full PDF document
File-URL: https://www.bis.org/publ/work1301.htm
File-Format: text/html
Number: 1301
Keywords: payments, CBDC, fast payments, banks, big tech, platforms
Classification-JEL: E42, E58, G21, L51, O31
Handle: RePEc:bis:biswps:1301