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Big techs, credit, and digital money

Author

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  • Markus Brunnermeier
  • Jonathan Payne

Abstract

This paper examines how digital payment ledgers operated by BigTech platforms and central banks can expand uncollateralized credit. However, policymakers face a trilemma-no system can simultaneously achieve efficient credit enforcement, limit rent extraction, and preserve user privacy. Monopolistic platforms enforce repayment but compromise privacy and extract rents; public or privacy-respecting ledgers protect users but weaken enforcement; platform co-opetition or programmable public ledgers balance enforcement and rents, but only by reducing privacy.

Suggested Citation

  • Markus Brunnermeier & Jonathan Payne, 2025. "Big techs, credit, and digital money," BIS Working Papers 1306, Bank for International Settlements.
    • Handle: RePEc:bis:biswps:1306
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    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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