How are central bank digital currencies changing the financial ecosystem?

Central bank digital currency deposit sealing effect

Can central bank digital currencies replace deposits? Such gains are a major concern in all countries and remain the riskiest risk for digital bank accounts. Some speculate that our country's digital bank will not withdraw money and will often switch to money because it does not charge interest. If we try to simplify China's restrictions and assume that the highest demand for our national digital bank is good i.e. those in power have and are ready to use a digital bank account, approximately 50% Yes. cash. -60% in cash and up to 20% deposit. At the same time, the value of the elasticity of deposits increases and loans increase.

Our country's digital banking system is meant to convert cash without fixing interest rates, but the main purpose of advertising does not necessarily mean that the bank equals in the long run after the announcement. There can be three strategies for consolidating central bank digital currencies on deposits. The first is the role of success in times of crisis, that is, in times of economic crisis, the digital currencies of the central bank can be filled in the form of bank deposits, and people can convert their money. in central bank digital currencies. Mechanisms and restrictions can also arise in the day-to-day life of businesses when there are no financial problems.

Behavioral behavior means that when users have access to the use of digital benefits through central banks, some payments can be made on the next payment. , money deposit apps and mobile payments. People often do things based on creative behaviors without thinking before and after. When new users use a digital bank account, it is not clear if the principle of simply changing cash can follow, but for future use. If it were too easy to use a digital bank account, it would benefit user behavior and push their assets.

The linking process means that you can change the design of your financial device by linking it to another cell phone using your bank account based on your credit card identity certificate. The digital advantages of our nationwide banking system go through the process of having no connection to money, and now people can choose not to open their card and tie their bank money in the middle. Because existing payments are not easily replaced. However, if the next generation's first account is an account with a bank account, that money can be used to cover other payments. Integration may seem unnecessary at this time, but can grow or prosper over generations. At the same time, the digital advantages of the central bank not only affect the existing payment model, but can also change the structure of the entire financial system, as the payment data flow itself is the most important data. simple.

Mid-sized banks around the world use various measures to cope with the potential for increasing deposits, but they all have differences and inconsistencies, including with different procedures at different interest levels prepared by the European Central Bank this year. year. In addition, some restrictions have been applied. Critical. However, despite the shortcomings of these operations, financial studies in other countries have shown the benefits of consolidating central bank funds. The deposits took place before the digital rewards. It may be necessary to study the national situation in our country and the national development plan. Korea has a good balance in advertising digital banking services, and the reasons for the concern and failure of many countries do not seem clear in Korea. In this situation, it is difficult for us to follow the plans and studies of other countries, but we have to study the special circumstances of our country.

If digital banking were announced, when would it be more appropriate? How much money can you change and click less deposit? The macro premise is that the lending environment should be flexible, the deposit rate should be real, the risk of the financial system should be low, and public confidence in national credit should be high. If we can achieve this, the central bank's digital currency issuance will be timely.

Will residents start holding digital bank accounts? In theory, there are three policy goals which cannot be achieved simultaneously. The first is that the fixed holders own the basis of the digital bank, the second is that the digital bank exchanges money, and the third is that the digital banking bank transfers money. Digital perks don't boost deposits. So what you are really going to face is the problem. The first case is that the bank's digital banking announcement has not been completed, so no one wants to keep it, and no money or deposits can be replaced. The second case is that the central bank has managed to advertise digital benefits, but at the same time it is withdrawing cash and clicking on deposits. Ideally, the amount of cash and deposits that will be withdrawn will depend on the preferences of the residents of each country and their digital currency plans.