June 5, 2020 Philadelphia Fed paper highlights the potential impact of CBDCs on commercial banks.

A new research paper, titled ‘Central Bank Digital Currency: Central Banking for All?’ and published by the Federal Reserve Bank of Philadelphia’s Research Department, investigates the potential impact of a central bank digital currency on commercial banks. The paper concludes that a CBDC could challenge the ‘traditional maturity-transforming role of commercial banks’, the function whereby banks borrow money on shorter timeframes than they lend out. The report also concludes however that such a scenario has the potential to undermine money markets.