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Positive CBDC stance linked to higher bank net interest margins

Economics, Econometrics and Finance research
Diliff, Wikimedia Commons, CC BY-SA 3.0 · CC BY-SA 3.0

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Research area:software-information-systemsinformation-systems

What the study found

The study found that a more positive central bank stance toward central bank digital currencies, or CBDCs, is associated with significantly higher banks' net interest margin (NIM), the difference between lending and deposit rates. The authors also describe a mechanism in which banks raise deposit rates to keep funds, which can be followed by higher lending rates.

Why the authors say this matters

The authors conclude that the findings offer a new perspective on how sovereign digital currencies may be integrated with traditional financial intermediaries. The study suggests CBDC development may affect bank profitability and intermediary functions.

What the researchers tested

The researchers analyzed bank-level data from 43 countries covering 2017 to 2022. They combined this with a CBDC stance index built from official central bank statements to examine how CBDC development relates to bank profitability.

What worked and what didn't

A more positive CBDC stance by central banks was associated with significantly improved NIM. The abstract says banks may respond to tougher deposit competition by raising deposit rates, and that this can also lead to higher lending rates.

What to keep in mind

The summary provided does not describe specific limitations, robustness checks, or causal identification details. It reports an association between CBDC stance and bank NIM, but does not state that the relationship is causal.

Key points

  • A more positive central bank stance toward CBDCs was linked to higher bank net interest margin.
  • The study used bank-level data from 43 countries from 2017 to 2022.
  • The CBDC stance measure was based on official central bank statements.
  • The authors describe deposit-rate increases as one response to deposit competition, with higher lending rates following.

Disclosure

Research title:
Positive CBDC stance linked to higher bank net interest margins
Authors:
X. M. Li, Yixuan Wang, Zixin Jiang, Xiaolin Zhang
Institutions:
Nankai University, Nankai University, Nankai University, University of North Carolina at Charlotte
Publication date:
2026-03-30
DOI:
10.1016/j.iref.2026.105181
OpenAlex record:
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Image credit:
Diliff, Wikimedia Commons, CC BY-SA 3.0
AI provenance: This post was generated by gpt-5.4-mini (OpenAI). The original authors did not write or review this post.

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