{
  "title": "To Demand or Not to Demand: On Quantifying the Future Appetite for CBDC",
  "publication": "IMF Working Papers, January 20, 2023",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2023/01/20/to-demand-or-not-to-demand-on-quantifying-the-future-appetite-for-cbdc-528060",
  "canonical": "https://www.imf.org/en/publications/wp/issues/2023/01/20/to-demand-or-not-to-demand-on-quantifying-the-future-appetite-for-cbdc-528060",
  "overlayPath": "/en/publications/wp/issues/2023/01/20/to-demand-or-not-to-demand-on-quantifying-the-future-appetite-for-cbdc-528060/index.md",
  "summary": "We set up a model of banks, the central bank, the payment system, and the surrounding private sector economic environment. It is a structural, choice-theoretic model which is deeply rooted in data.",
  "sections": [
    {
      "heading": "Model and approach",
      "content": "- Structural, choice-theoretic model of banks, the central bank, the payment system, and the surrounding private sector economic environment.\n- Model is deeply rooted in data and is used to run a structural counterfactual that introduces a Central Bank Digital Currency (CBDC) which is optionally interest-bearing.\n- Model outputs can be used to estimate emerging CBDC-in-total-money shares, changes in deposit rate spreads to policy rates, impacts on reserve needs, rotation of profits between banks and central banks, and changes in monetary policy pass-through.\n- Model codes to replicate results and to apply the model to other countries are made available with the paper."
    },
    {
      "heading": "Key quantitative findings",
      "content": "- Upper bound estimates for CBDC-in-money shares:\n  - \"about 25 percent\" for the U.S.\n  - \"about 20 percent\" for the euro area\n- These upper bounds apply when CBDC would be remunerated at the policy rates and be perceived as “deposit-like” by the public.\n- Actual take-up may likely be below such upper bound estimates."
    },
    {
      "heading": "Outcomes and channels analyzed",
      "content": "- Drop of deposit rate spreads to policy rates.\n- Impact on reserve needs.\n- Implied rotation of profits away from banks toward central banks.\n- Potential for monetary policy pass-through to become stronger."
    },
    {
      "heading": "Policy implications and considerations",
      "content": "- CBDC remuneration at policy rates and public perception of CBDC as “deposit-like” are key determinants of upper-bound demand.\n- Even with high potential shares (see Key quantitative findings), actual take-up may be lower, implying policymakers should consider behavioral and institutional factors that limit adoption.\n- Effects on bank funding costs, reserve management, and central bank seigniorage should be assessed when evaluating CBDC implementation and design choices."
    },
    {
      "heading": "Replicability and use",
      "content": "- Model codes are provided to replicate all results and to apply the framework to other countries.\n\nIMF Working Paper No. 2023/009 — \"To Demand or Not to Demand: On Quantifying the Future Appetite for CBDC\", Marco Gross and Elisa Letizia, January 20, 2023.\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2023/01/20/to-demand-or-not-to-demand-on-quantifying-the-future-appetite-for-cbdc-528060"
    }
  ],
  "bullets": [
    "[Markdown version](/en/publications/wp/issues/2023/01/20/to-demand-or-not-to-demand-on-quantifying-the-future-appetite-for-cbdc-528060/index.md)",
    "[Structured JSON version](/en/publications/wp/issues/2023/01/20/to-demand-or-not-to-demand-on-quantifying-the-future-appetite-for-cbdc-528060/index.json)",
    "[Bundle manifest](/en/publications/wp/issues/2023/01/20/to-demand-or-not-to-demand-on-quantifying-the-future-appetite-for-cbdc-528060/bundle-manifest.json)",
    "Authors: Marco Gross, Elisa Letizia",
    "Published: January 20, 2023",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9798400228780.001",
    "Structural, choice-theoretic model of banks, the central bank, the payment system, and the surrounding private sector economic environment.",
    "Model is deeply rooted in data and is used to run a structural counterfactual that introduces a Central Bank Digital Currency (CBDC) which is optionally interest-bearing.",
    "Model outputs can be used to estimate emerging CBDC-in-total-money shares, changes in deposit rate spreads to policy rates, impacts on reserve needs, rotation of profits between banks and central banks, and changes in monetary policy pass-through.",
    "Model codes to replicate results and to apply the model to other countries are made available with the paper.",
    "Upper bound estimates for CBDC-in-money shares:",
    "These upper bounds apply when CBDC would be remunerated at the policy rates and be perceived as “deposit-like” by the public.",
    "Actual take-up may likely be below such upper bound estimates.",
    "Drop of deposit rate spreads to policy rates.",
    "Impact on reserve needs.",
    "Implied rotation of profits away from banks toward central banks.",
    "Potential for monetary policy pass-through to become stronger.",
    "CBDC remuneration at policy rates and public perception of CBDC as “deposit-like” are key determinants of upper-bound demand.",
    "Even with high potential shares (see Key quantitative findings), actual take-up may be lower, implying policymakers should consider behavioral and institutional factors that limit adoption.",
    "Effects on bank funding costs, reserve management, and central bank seigniorage should be assessed when evaluating CBDC implementation and design choices.",
    "Model codes are provided to replicate all results and to apply the framework to other countries.",
    "**Working Paper**"
  ],
  "related": [
    {
      "title": "Working Paper",
      "role": "paper",
      "sourceUrl": "https://www.imf.org/-/media/files/publications/wp/2023/english/wpiea2023009-print-pdf.pdf",
      "summary": {
        "path": "/-/media/files/publications/wp/2023/english/wpiea2023009-print-pdf.pdf.md",
        "mime": "text/markdown"
      },
      "binary": {
        "path": "/-/media/files/publications/wp/2023/english/wpiea2023009-print-pdf.pdf",
        "mime": "application/pdf"
      }
    }
  ],
  "alternates": {
    "markdown": "/en/publications/wp/issues/2023/01/20/to-demand-or-not-to-demand-on-quantifying-the-future-appetite-for-cbdc-528060/index.md",
    "json": "/en/publications/wp/issues/2023/01/20/to-demand-or-not-to-demand-on-quantifying-the-future-appetite-for-cbdc-528060/index.json",
    "bundleManifest": "/en/publications/wp/issues/2023/01/20/to-demand-or-not-to-demand-on-quantifying-the-future-appetite-for-cbdc-528060/bundle-manifest.json"
  },
  "generatedAtUtc": "2026-09-16T22:05:50.874Z"
}