The effects of Central Bank digital currency system on the banking sector

Digitalization, which creates and develops innovations in every sector, also creates a new digital form of money by showing its effect on money. Digital money is a form of money that is only traded electronically and has an abstract asset. Central banks are working to produce their own digital currencies. In this study, a possible central bank digital currency system and its effects on the banking sector are examined. In order to understand the central bank digital currency system, firstly the digital currencies that are traded today are analyzed and then the transformation of the money format and the possible changes in the banking sector are analyzed. In this context, it is thought that it would be beneficial to make predictions that are closest to the truth. It is aimed to eliminate the lack of information on this issue in the national and international literature and to shed light on future studies. In the study, a survey study was conducted in order to get opinions about the changes that may occur in the sector. As a result of the survey conducted with the senior managers of the banks in Turkey, the opinion that the central bank digital currency system will be adopted as a new monetary system comes to the fore. The change for the sector will be especially in the direction of increasing the transaction speed and decreasing the transaction cost. In addition, a contraction in the number of branches and employment capacity in the banking sector is among the expected changes, as all transactions can be carried out remotely. Also, it is thought that ATMs may disappear or their functions may change in the new money system. An increase in seigniorage earnings is expected in line with the expectation that the cost of producing money will be lower. Finally, when the current epidemic is taken as an example, it is predicted that the negative effects of this and similar epidemics on the sector will be less in the digital currency system.