A public central-bank wallet can drain private banks of deposits

Evidence

Imagine that the central bank provided everyone with a free digital wallet, effectively a free bank account. To attract people to use it, a stipend (or basic dividend) is credited monthly to each account making universal basic income a reality. Taking one step further, the central bank pays interest to those who shift monies from their savings at commercial banks to their new digital wallet. In time, a mass if not total exodus would follow as people moved their savings from the private banks to this new public digital payments and savings system. — Yanis Varoufakis, Technofeudalism, 720

Categorization

• XREF: This is essentially the ‘narrow banking’ idea and resembles Christopher Williams’s and John Kay’s proposals; also echoes CBDC debates at the Bank of England. — connects to: Banks create money by keystroke, not by lending existing deposits
• corroborated: 2 independent passages support this claim — Yanis Varoufakis, Technofeudalism: What Killed Capitalism, 720