Share this article
JPMorgan: CBDCs Must Not Cannibalize Commercial Financial Systems
This risk lies in banking customers moving the funds from checking accounts to a CBDC account, eroding commercial banks' funding base.
Updated Sep 14, 2021, 1:36 p.m. Published Aug 6, 2021, 11:53 a.m.
Central bank digital currencies (CBDCs) must not cannibalize countries' commercial financial systems, according to a JPMorgan analyst.
STORY CONTINUES BELOW
Don't miss another story.Subscribe to the Crypto Daybook Americas Newsletter today. See all newsletters
- This risk lies in banking customers moving funds from checking accounts to a CBDC account, which could lead to the exodus of as much as 30% of commercial banks' funding base, JPMorgan strategist Josh Younger wrote in a note cited by Bloomberg on Friday.
- "Relatively heavy-handed caps on holdings would be needed to reduce the utility of a retail CBDC as a store of value," Younger said in the note.
- Younger proposed a limit of $2,500. That would meet the needs of lower-income households without having a major effect on commercial banks' funding mix, given that most such households have less than $1,000 in their checking accounts.
- "If every last one of those depositors were to hold only [a] retail CBDC, it would not have a material impact on bank funding," he wrote.
- A hypothetical conflict between central banks and commercial banks for consumer deposits is often raised as a risk in the development of CBDCs. Were consumers to place all their funds in an account with the central bank then it would hinder commercial banks' ability to offer loans and mortgages, with a knock-on effect on the wider economy.
Read more: Fed’s Brainard Says US Can’t Not Have a CBDC in a World in Which Others Have Them
More For You
What to know:
- As of October 2025, GoPlus has generated $4.7M in total revenue across its product lines. The GoPlus App is the primary revenue driver, contributing $2.5M (approx. 53%), followed by the SafeToken Protocol at $1.7M.
- GoPlus Intelligence's Token Security API averaged 717 million monthly calls year-to-date in 2025 , with a peak of nearly 1 billion calls in February 2025. Total blockchain-level requests, including transaction simulations, averaged an additional 350 million per month.
- Since its January 2025 launch , the $GPS token has registered over $5B in total spot volume and $10B in derivatives volume in 2025. Monthly spot volume peaked in March 2025 at over $1.1B , while derivatives volume peaked the same month at over $4B.
More For You
Japan’s Higher Rates Puts Bitcoin in the Crosshairs of a Yen Carry Unwind
A stronger yen typically coincides with de-risking across macro portfolios, and that dynamic could tighten liquidity conditions that recently helped bitcoin rebound from November’s lows.
What to know:
- The Bank of Japan is expected to raise interest rates to 0.75% at its December meeting, the highest since 1995, affecting global markets including cryptocurrencies.
- A stronger yen could lead to de-risking in macro portfolios, impacting liquidity conditions that have supported bitcoin's recent recovery.
- Governor Kazuo Ueda indicated a high probability of a rate hike, with officials prepared for further tightening if their economic outlook supports it.
Top Stories
