On May 18, the Bank of England published a Commission staff working paper presenting various scenarios of possible threats and issues of financial stability of central currencies of central banks (CBDC)


The document creates three CBDC models depending on the sectors that have access to the CBDC, in which access is limited to banks and non-bank financial institutions (NBFI), for direct and indirect access extended to households and non-financial companies.

The access model to financial institutions is limited to banks and NBFIs where financial institutions can directly cooperate with the central bank to buy and sell CBDC in exchange for eligible securities. Financial institutions should not provide assets to households and companies that are fully supported by central bank money.

The access model to the entire economy assumes that access to CBDC is granted to banks and NBFI, households and companies. In this way, CBDC can be used as money for everyone in the economy. Although only banks and NBFI can work directly with the central bank to buy and sell CBDC, the report says that “households and companies must use the CBDC exchange to buy and sell CBDC in exchange for deposits”

Within financial institutions plus access to the simplified model CBDC in the “narrow” access bank is again limited to banks and NBFI. There is at least one financial institution that acts as a “narrow bank” that provides financial assets to households and companies that are fully supported by the CBDC, but does not grant credit.

In particular, the report concludes that, after the first approximation, there is no reason to believe that the introduction of CBDC would have a negative impact on private credit or ensure full liquidity for the economy. Although the report specifies that further models and studies are needed to make a more specific determination.

Central banks are gradually investigating the introduction of CBDC and their potential impact on the banking system. Last week, the central bank of Norway issued a working document in the CBDC case. The report prepared by the Norges bank examines the aspects that, in their opinion, should be taken into account when assessing CBDC emissions.

The Federal Council of the Swiss Government has requested a report on the risk and the possibility of introducing its own state-supported digital currency (the so-called ‘E-franc’). The proposal also aims to explore and clarify the legal, economic and financial aspects of the e-franc.