Interest-bearing CBDCs could be better for depositors – study
CEPR study says there is “optimal” rate at which currencies would improve people’s welfare
Introducing central bank digital currencies that earn interest would reduce banks’ power in the market, yielding higher rates for depositors, a new study claims.
The paper, published on July 9 by the Centre for Economic Policy Research, argues that there is an optimal rate at which interest-earning CBDCs could improve citizens’ welfare. This would be a rate that maximised the benefits to the economy without “unduly harming the banking sector”. If the CBDC paid a low rate of interest, households
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