Population Scale UK CBDC Adoption Agent based Model (UK CBDC ABM)

Objective: 

Bank of England, like central banks worldwide, aims to launch CBDC, dubbed the Digital Pound, to respond to dwindling use of state supplied physical notes and coins, and developments from Big Tech digital monies. Its success is vital to safeguard the singleness of money as a non-excludable public good and vitiate societal fragmentation on the monetary front. However, given what economists call network effects with widely used card payments, and people’s reluctance to fully give up cash, the Digital Pound may not reach critical mass to make it sustainable.

We develop a web-based dissemination platform for a population scale data-driven UK CBDC Adoption Agent-based model (ABM) to fill the gap in the CBDC policy sphere to stress test myriad design options. This is to mitigate systemic risks from a run on commercial banks and to assess, with some degree of urgency, which of these designs are likely to lead to sustainable rates of CBDC adoption. A large cohort of UK SME merchants, who uniquely have a ‘natural’ incentive in accepting CBDC in lieu of card payments to reduce merchant fees, are the focus of an APP being developed so they can be instrumental in a tipping point for CBDC adoption.

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