Abstract
We provide a market-based evaluation of sight deposits of banks when Central Bank Digital Currency (CBDC) is issued. We investigate the effects of different adoption rates (moderate, large or capped adoption), of different remuneration schemes and of the possibility of a bank-run. We perform the analysis at the aggregate level for the Euro area and the United States. We show that the effect of CBDC on deposit market value is small unless a large adoption rate is considered. The remuneration scheme plays a significant role only in the moderate/capped adoption scenario in relative terms and in a high interest rate environment. Instead, the possibility of a bank-run calibrated on the experience of the Euro area and of Greece during the debt crisis has little effect on the value of deposits even if a CBDC is introduced.
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