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Introducing New Forms of Digital Money: Evidence from the Laboratory

Author

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  • Gabriele Camera

    (Economic Science Institute, Chapman University)

Abstract

Central banks may soon issue currencies that are entirely digital (CBDCs) and possibly interest-bearing. A strategic analytical framework is used to investigate this innovation in the laboratory, contrasting a traditional “plain†tokens baseline to treatments with “sophisticated†interest-bearing tokens. In the experiment, this theoretically beneficial innovation precluded the emergence of a stable monetary system, reducing trade and welfare. Similar problems emerged when sophisticated tokens complemented or replaced plain tokens. This evidence underscores the advantages of combining theoretical with experimental investigation to provide insights for payments systems innovation and policy design.

Suggested Citation

  • Gabriele Camera, 2022. "Introducing New Forms of Digital Money: Evidence from the Laboratory," Working Papers 22-11, Chapman University, Economic Science Institute.
    • Handle: RePEc:chu:wpaper:22-11
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    File URL: https://digitalcommons.chapman.edu/esi_working_papers/372/
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    Cited by:

    1. is not listed on IDEAS
    2. Dimitriadis, Konstantinos A. & Koursaros, Demetris & Savva, Christos S., 2024. "Evaluating the sophisticated digital assets and cryptocurrencies capacities of substituting international currencies in inflationary eras," International Review of Financial Analysis, Elsevier, vol. 96(PB).
    3. Luis Araujo & Leo Ferraris & Marco Mantovani & Daniela Puzzello, 2025. "Experimenting with Digital Currency," Working Papers 557, University of Milano-Bicocca, Department of Economics.
    4. Olivier Armantier & Charles Holt, 2024. "Can Discount Window Stigma Be Cured? An Experimental Investigation," Staff Reports 1103, Federal Reserve Bank of New York.

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    Keywords

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    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General

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