No. 85 - Household Allocation of the Next Generation of Digital Money

Markets, Infrastructures, Payment Systems
by Marcello Pericoli
July 2026
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This paper examines how households allocate their holdings across three forms of digital money: central bank digital currencies (CBDCs), stablecoins and bank deposits. Each instrument provides a distinct combination of financial returns and transactional features, such as usability, programmability and privacy. The analysis shows that well-designed CBDCs can strengthen monetary sovereignty and improve household welfare even without remuneration, provided they are convenient and trusted. Stablecoins backed by weak reserve structures pose systemic risks and may destabilize the monetary system. Upgrading the payment infrastructure for bank deposits helps preserve the role of commercial banks and supports the transmission of monetary policy. The findings provide insights for central banks and regulators navigating the transition to a digital monetary environment.

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  1. 29 July 2026
    No. 85 - Household Allocation of the Next Generation of Digital Money
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