Central Bank Digital Currencies: Experimental Evidence of Deposit Conversion
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Ekaterina Shakina
,
Michael Hanke
and
Scott Ellis
Abstract
In this paper, we provide unique experimental evidence of depositors’ behaviour in presence of a possibility to convert commercial bank deposits into central bank digital currency (CBDC). Theoretically and experimentally we analyse whether such an option incentivises bank runs. We find that the availability of the deposit conversion option does not lead to a significant outflow of deposits. However, when conversion is restricted, depositors are eager to actively use it as a coordination tool. These findings highlight the importance of considering coordination and decision time in determining the choice to convert deposits into CBDC. Our study evidences that policy-makers should balance accessibility and control measures to maintain financial stability, ensuring that CBDC implementation supports the resilience of the banking system.
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Research funding: The experiments for this paper were funded by the University of Liechtenstein.
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Supplementary Material
This article contains supplementary material (https://doi.org/10.1515/bejeap-2024-0192).
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Articles in the same Issue
- Frontmatter
- Research Articles
- Selection Efficiency in Multiple-Prize Tournaments with Sabotage
- Priced Out: Do Adolescents from Low-Income Families Respond More to Cost-Sharing in Primary Care?
- International Commodity-Tax Competition and Asymmetric Producer Prices
- Letters
- Absolute versus Relative Poverty and Wealth: Cooperation in the Presence of Between-Group Inequality
- Cross Ownership Under Strategic Tax Policy
- Central Bank Digital Currencies: Experimental Evidence of Deposit Conversion
- Earthquakes and Intertemporal Preferences: A Field Study in Italy
