Agent-Based Simulation of Central Bank Digital Currencies
28 Pages Posted: 10 Nov 2021
Date Written: November 9, 2021
Abstract
This paper presents a multi-period agent-based model for the study of macro-financial effects related to the introduction of a retail Central Bank Digital Currency (CBDC). Calibrating it with aggregate statistics of the German retail payment market, we exemplify how the model can be used to quantify the impact of a CBDC on i) the usage of alternative means of payments, ii) the composition of consumer's wealth, and iii) the banking sector disintermediation. We find that CBDC can be configured without largely impacting the banking sector balance sheet. However, we also find those card companies may suffer a substantial decline in their transaction revenues. We see this model as a framework that can be enriched and tuned to answer a myriad of questions relevant to different jurisdictions from a macro-financial angle. The model is publicly available in the FNA simulation platform for running other policy experiments i.e., testing the efficacy of alternative configurations of CBDCs.
Keywords: CBDC, payment systems, agent-based model, economic impact, disintermediation
JEL Classification: C63, E41, G21, G28
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