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Simulating the Adoption of a Retail CBDC

Author

Listed:
  • León Carlos

    (Financial Network Analytics Ltd., Tilburg University, London, UK)

  • Moreno Jose F.

    (Financial Network Analytics Ltd., Barcelona, Spain)

  • Soramäki Kimmo

    (Financial Network Analytics Ltd., London, UK)

Abstract

We use agent-based modelling to build a digital twin of the retail payment system, where heterogeneous consumers and merchants interact, learn, and adapt as they meet and use different monies and payment instruments. As we introduce an rCBDC, the model simulates its adoption. We calibrate this digital twin to Spain’s retail payment ecosystem. We run hypothetical scenarios that correspond to public discussions about the digital euro. Results show that introducing an rCBDC without attractive design options and stimulus results in low and slow adoption. Results suggest that the reverse waterfall functionality, a positive remuneration spread, and the distribution of government subsidies via rCBDC are effective in fostering adoption; yet, the distribution of government subsidies via rCBDC is the only one that creates incentives to reduce the use of cash. Balance limits and top-up limits are effective in restraining adoption. Results also suggest that combining design options and stimulus with limits to holding rCBDCs could aid in achieving a sweet spot of adoption.

Suggested Citation

  • León Carlos & Moreno Jose F. & Soramäki Kimmo, 2025. "Simulating the Adoption of a Retail CBDC," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 245(4-5), pages 401-433.
    • Handle: RePEc:jns:jbstat:v:245:y:2025:i:4-5:p:401-433:n:1002
    DOI: 10.1515/jbnst-2024-0002
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    More about this item

    Keywords

    payments; money; agent-based modelling; simulation; digital twin;
    All these keywords.

    JEL classification:

    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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