Academic Study Analyzes the Impact of CBDCs on Monetary Policy
A new working paper (NBER) examines how household preference shocks regarding CBDCs affect the banking system and the economy, suggesting that interest rate policy on CBDCs may have a "moderately expansionary effect."
The Quiet Revolution of Central Banks: Why NBER Is Rewriting the Rules for CBDCs and Cryptocurrencies
[The Gist]: What's Really Happening
A new working paper from the National Bureau of Economic Research (NBER), which you may have seen in the news, might seem like just another dry academic study at first glance. But in reality, it is a manifesto for a new era. The researchers have turned the classic understanding of how CBDCs (central bank digital currencies) and stablecoins will compete completely upside down.
The main conclusion sounds heretical to anyone who has followed the debates over the past five years: interest-bearing digital currency could kill its use as a means of payment. The logic is simple: if you know your token will appreciate (or earn interest), you have an incentive to "hoard" it rather than "spend" it. Economists have dubbed this the paradox of "too good a store of value" (a money that is “too good” as a store of value may circulate less as a payment instrument).
In practice, this means the collapse of a narrative actively promoted by many crypto startups and even some central banks: "We will issue a CBDC yielding 4% annually, and everyone will flee banks to join us." NBER mathematically proves that such a scenario would lead to the CBDC becoming a digital treasure chest that no one opens. Money would cease to function as money, and the economy would suffocate. This finding is not merely academic—it is a blueprint for the Fed, the ECB, and the People's Bank of China on how NOT to design a digital currency.
Timeline and Context
This study did not emerge in a vacuum. It is a reaction to real changes in central bank policy happening right now. Below is how the CBDC landscape evolved in 2026 against the backdrop of the NBER publication.
| Date | Event | Connection to NBER Study |
|---|---|---|
| January 2026 | China launches "digital deposit money" (e-CNY), allowing commercial banks to pay interest on the digital yuan. | China goes against the NBER thesis on the harm of yield, creating a "natural experiment" to test the theory. |
| May 2026 | NBER study published. | Warning that if China overdoes the yield, e-CNY could become a "black hole" for liquidity rather than a means of payment. |
| June 2026 | ECB raises rates to 4.25%; Kevin Warsh takes over the Fed with a plan to shrink the balance sheet. | A macro environment is created where rates on "risk-free" assets are high, amplifying the "savings" effect described by NBER. |
| Now | Europe postpones the digital euro until 2029, and the US abandons the retail CBDC. | The world is moving toward a "hybrid" model: either two-tier CBDCs (as in Turkey) or the dominance of private stablecoins regulated as utilities. |
The most interesting aspect here is the divergence of strategies. China went all-in, introducing interest and a deposit model (trying to make e-CNY a savings instrument), while the US (via new Fed Chair Warsh) and Europe (via abandoning CBDCs) are moving toward a "payment utility" without interest, leaving yield to the private market. The NBER study directly states that the second strategy is more viable.
Who Wins and Who Loses
This study is a bombshell for the market. It reshuffles the map of influence among traditional banks, crypto exchanges, and central banks.
Winners #1: Traditional banks (JPMorgan, BNP Paribas). If CBDCs do not bear interest or are strictly limited (as Europe proposes with a €3,000 cap), then a bank run will not occur. Banks retain their role as lenders. Moreover, the "two-tier CBDC" model being tested by the Central Bank of Turkey and proposed by NBER authors assumes that tokens are distributed through banks, not directly by the central bank, leaving banks their commission margin.
Winners #2: Stablecoins backed by US Treasury bonds (USDC, PYUSD). This is my main non-obvious insight. The NBER study argues that yield harms the use of a currency. But for stablecoins, which are rarely used for "consumption" and instead serve as a medium for trading and DeFi, yield is a trump card. New Fed Chair Warsh, who holds $200 million in crypto, effectively legitimizes "stablecoins as digital Treasury bills." While Europe's cumbersome CBDC will be stuck in regulation until 2029, USDC can quietly occupy the niche of an "interest-bearing digital dollar" in the global market.
Losers: High-yield government digital currencies (e.g., an aggressive version of e-CNY). If NBER is right, China's attempt to make e-CNY attractive for savings will lead companies and citizens to withdraw yuan from the banking system to put them into digital wallets. This would trigger a credit crisis in the traditional banking system that China has long built. This is exactly what academic CBDC models predict—massive disintermediation of banks.
What the Media Isn't Saying
They aren't saying that the NBER study legitimizes Warsh's "Big Bang." While the media writes about Fed rates, Warsh is preparing a "liquidity shock." His plan is to shrink the Fed's balance sheet from $4.4 trillion to $2 trillion. Where will the liquidity go? Into stablecoins. According to the NBER model, private tokens, not government CBDCs, will become the "store of value" that people hold. The Fed doesn't need to create its own token; it just needs to allow the market to do so under supervision.
The second omission: the ECB is losing the "battle of paradigms" right now. ECB board member Schnabel is sounding the alarm, calling stablecoins a threat to sovereignty. But while the ECB tries to invent the perfect digital euro (and postpones it until 2029), US stablecoins (USDC) are capturing 75% of a $320 billion market. The NBER study provides them with theoretical justification: don't interfere with private issuance of "savings instruments."
And third: Turkey and the "Middle Path." A new study by the Central Bank of Turkey proposes a middle ground—a two-tier architecture. This means a CBDC exists but does not compete with banks; instead, it works through them. This perfectly correlates with the NBER findings on comparative advantage between the payment function and the store of value function. This will be copied by India and Brazil within the next 12 months.
Forecast: Next 30 Days and 90 Days
Next 30 days (until mid-July 2026): The Fed meeting on June 16-17 will be a litmus test. If Warsh announces aggressive QT (quantitative tightening) and confirms the abandonment of CBDCs, we will see a sharp capital shift from bank deposits into tokenized money market funds (MMFs) and stablecoins. Bitcoin's price may temporarily dip due to "liquidity leakage" (risk-off), but then the market will realize that Warsh is legitimizing "crypto mortgage." I expect USDC's market cap to grow by 15-20% within a month.
Next 90 days (until mid-September): A "race to the bottom" will begin between banks and stablecoin issuers. Banks, frightened by the NBER model, will start offering their own tokenized deposits to compete with USDC. Payment giants (PayPal, Stripe) will come out ahead. Coinbase (COIN) shares, as the main beneficiary of USDC turnover, could gain 25-30%. The European digital euro will be declared a "dead" project for years to come, causing a brain drain from European regulators to the US.
Editorial Forecast
Asset: USDC (Circle) and tokenized funds (BUIDL from BlackRock). Direction: Up. In the next 24–72 hours, amid the publication of NBER analysis and anticipation of the Fed's verdict, institutions will start increasing positions in yield-bearing digital dollars. Key benchmark: USDC's market cap could exceed $80 billion, breaking through year-long resistance. Confidence level: high (75%). Main risk to the forecast: if Warsh unexpectedly changes rhetoric at the Fed meeting and supports the launch of a government CBDC (5% probability), it would crash private stablecoins by 10-15%. However, the current composition of the Fed and the personal interests of its chair make this scenario nearly impossible. This forecast is an editorial opinion, not investment advice.
— Editorial Team
