Is CBDC a potential threat to European commercial banks?

• Autor(a) principal: Almeida, David Ferreira de
• Data de Publicação: 2023
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10071/30057
• topic: Digital euro; Commercial banks; Banking disintermediation; Bank runs; Financial stability; Euro digital; Bancos comerciais; Desintermediação bancária; Corrida aos depósitos; Estabilidade financeira

The digital euro is still in the development stage, so there are still many questions about its characteristics and how its implementation will impact the European financial system. Since it is a recent project, there is still no extensive and detailed study in the current literature on the different domains where this currency will intervene. Thus, this work aims to contribute to the dissemination of the digital euro and to foster a deeper understanding in order to help anticipate possible constraints when applying it. This work aims to specifically investigate the impact that the digital euro will have on the normal functioning of European commercial banks, thus seeking to predict the level of impact as well as possible actions to reduce it. This investigation initially began by studying the design of digital currency, examining the characteristics that the European Central Bank may choose to adopt. The likely effects of the digital euro on commercial banks were then examined, with a focus on the development of banking disintermediation and the likelihood, speed, and magnitude of bank run phenomena. Monetary policy was also the subject of analysis in order to understand whether it would benefit from the introduction of this currency. During the study, the three main players in this process were analyzed in all situations, namely European commercial banks, the European Central Bank, and users of the digital euro. This thesis concludes that the digital euro may, under certain circumstances, compromise the stability of the commercial banking system in Europe.