A primary structural concern regarding the introduction of a retail CBDC is the risk of Commercial Bank Disintermediation during market crises.
The Banking Flight Risk Cascade
[Market Panic Spikes] ---> Consumers withdraw bank deposits ---> Move capital to risk-free CBDC wallets ---> Bank credit supply contracts

Because central bank money carries no credit or default risk, consumers may quickly shift their savings out of commercial bank deposits and into retail CBDC wallets during a financial panic. To mitigate this flight risk, central banks implement protective design barriers:
  • Holding Caps: Imposing hard limits on the maximum volume of CBDC tokens an individual citizen can store in their digital wallet (e.g., a cap of 3,000 tokens).
  • Tiered Interest Rates: Applying zero or negative interest rates to balances that exceed defined thresholds, encouraging consumers to keep their savings within the commercial banking sector.

 
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