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Visa’s Amazon Blues Will Shape the Digital Cash Debate

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This is just a trade-off between a number. Think how the card business of banks could be affected by the emergence of central bank digital currencies or CBDCs. You decide to buy a book on your Kindle with your brand new credit card. Before you draw your line of credit, a lender’s balance sheet – in the words of Stanford University economist Monika Piazzesi – is “empty” and free. (If you use a debit card, the bank will ask you for a deposit and loan assets on the other side of the balance sheet before you buy the book. This will result in additional costs. ) When you pay with credit, the bank creates a deposit in favor of Amazon, automatically backed by an asset: what you owe the bank. This “addition between deposits and lines of credit” has made it cheaper for banks to process these payments, Piazzesi says.

https://www.washingtonpost.com/business/visas-amazon-blues-will-shapethe-digital-cash-debate/2021/11/22/ebf5a8b8-4bec-11ec-a7b8-9ed28bf23929_story.html?utm_source=rss&utm_medium=referral&utm_campaign=wp_business Visa’s Amazon Blues Will Shape the Digital Cash Debate

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