A new study conducted by the Office of Financial Research of the United States Treasury has found that the integration of a stablecoin or central bank digital currency into the economy could have a destabilizing effect on banks, but might improve the welfare of households.
The authors of the study discussed the potential for systemic deleveraging in the banking sector, which could reduce stability during times of economic crisis, if digital currencies were to be introduced.
They have proposed that, if such digital currencies were to exist, bank deposits would be in direct competition with them in households’ liquidity portfolios and could, as a result, lead to banks paying higher rates on deposits and having less equity than they currently do.
